Dollar Slides, Euro, Yen gain

Financials: Mar. Bonds are currently 4 lower at 155’11, 10 Yr. Notes 2 lower at 126’19.5 and 5 Yr. Notes 1.2 lower at 118’28. These markets have rallied a bit in the last few sessions as the Dollar has weakened and the spread between our 5 Yr. Note yield and that of Germany makes an attempt at narrowing the yield spread. Keep in mind that the Ger. 2 Yr. is at a negative yield. We continue to hols the ratio spread of long 3-5 Yr.
Notes/2-10 Yr. Notes which has picked up a few ticks over the last couple of sessions. My plan is to hold the position through next weeks FOMC meeting of which I expect a slight bump up in rates. The yield difference between the 5 and 10 Yr. is currently 57 basis points, I expect this to widen to 65-70 basis points premium the 10 Yr.

Grains: Mar. Corn is currently fractionally higher at 374’0, Jan. Beansd fractionally lower at 875’6 and Mar. Wheat 3’0 lower at 486’6. We remain long Mar. Corn with a protective sell stop at 367’0. If the market trades above the 379’0 level either take profits or raise your stop to 369’0. The long Mar. KC Wheat/short Chi. Wheat spread is currently at 8’6 premium the Chi. Wheat contract. Our objective is for the KC Wheat to go 8’0 over the Chi. Contract.

Cattle: Live and Feeder Cattle once again closed sharply lower on new recent lows as the market continues to react to slow demand and oversupply. I feel that seasonal holiday demand will come into play at some point and remain long Feb. LC. If you are holding the long Apr./short June spread from below the 780 premium Apr. level take profits above 840 if/when the market allows.

Silver: Mar. Silver is currently lower at 14.15 and Feb. Gold 3.00 lower at 1073.50. We continue to hold a small long position, although I will note my diappointment in their performance cgiven the sharp slide in the Dollar this week inspite of the fact that they are well off recent lows.

S&P's: Dec. S&P’s are currently 3.50 higher at 2045.00. Yesterday the market traded below the 200 moving day average of 2039.25 giving us reason to go short on a close below this level. For the moment I am a seller in the 2056.00-2061.00 area for short term trades. On Monday we will start trading the Mar. Contract.

Currencies: As of this writing the Mar. Euro is currently 74 lower at 1.0981, the Yen 19 lower at 0.8254 and the Pound 32 lower at 1.5133. If you remain long DEC. Yen either take profits or roll your position into theMar. Contract and use a protective sell stop at 0.8180. Dec. contracts expire on the 14th.