Equities recover as China reportedly intervenes

Financials: Dec. Bonds are currently unchanged at 154’18, 10 Yr. Notes 4.5 lower at 127’08 and 5 Yr. Notes 6 lower at 119’23. The ratio spread of long 5-5Yr. Notes/short 3-10 Yr. Notes has moved our way over the last few sessions as the difference in yield has moved from 61 basis points premium the 10 Yr. to 70 basis points premium the 10 Yr. I’m going to take profits. If you are spread 1:1 long 5 Yr./short 10 Yr., this spreade has also moved about 20 points in our favor, I recommend staying with this position at the moment.

Grains: Dec. Corn is currently 1’4 higher at 374’6, Nov. Beans 11’0 higher at 876’0 and Dec. Wheat 1’0 higher at 495’2. We were stopped out of recent longs with a small profit when the market traded through our sell stops of 377’0 in Dec. Corn and 877’0 in Nov. Beans. I am willing to once again try the long side on a 5-10’0 break from current levels.

Cattle: We were stopped out of recent longs in Dec. LC when the market traded below the 143.50 level. As I have mentioned over the last week my bias has changed from negative to neutral and I am willing to “nibble” at the long side of the market after being bearish for the most part over the last 6-8 months. I am currently on the sidelines in Feeders as my downside objectives have been met.

Silver: Dec. Silver is currently 10 cents higher at 14.14 and Dec. Gold 1.00 higher at 1125.00. No question thaat these markets have been following the decline in Commodities in general over the last few months. That being said I am still willing to hold a small long silver position as part of a strategic portfolio.

S&P's: Sept. S&P’s are currently 17.00 higher at 1955.00. We have covered the combination trade of short futures/short puts. As mentioned in Tues. Aug. 25th’s “Report” I am a seller above 1950.00 and a buyer below 1890.00. So far, so good.

Currencies: As of this writing the Sept. Euro is currently 85 lower at 1.1263, the Yen 65 lower at 0.8308 and the Pound 35 lower at 1.5431. Earlier in the week we took profits from long Pound positions. I will reinstate a long Pound position below the 1.5300 level if the market allows. Several readers have noted that I no longer quote the Swiss. Quite frankly, after several instances (Aug. 2011, Sept. 2011, Jan. 2015) of Swiss central bank intervention resulting in single day moves in excess of $10,000 per contract I feel the risk/reward is too much out of line.