Equities recover from overnight lows

Financials: Dec. Bonds are currently 8 higher at 153’21, 10 Yr. Notes 7 higher at 126’24 and 5 Yr. Notes 4.5 higher at 119’06.5. While not trying to be mercenary and believing that profitting from other peoples’ misfortune being either bad Karma or bad juju we are currently long 10 Yr. Notes/short 5 Yr. Notes which has moved our way in a flight to safety as a result of the terrorist attacks in Paris. As mentioned in my last “Report” I want to take profits this week and enter a ratio spread position of long 3 March 5 Yr. Notes/short 2 Mar. 10 Yr. Notes with the idea that at 60 basis points difference between the yield on the 5 Yr. vs. thwe 10 Yr. the spread is at a narrow point of support and can widen to 70+ points should the FED raise rates. I will also be willing to once again initiate the long June 2016/short the June 2017 Eurodollar spread below the 63 point level (currently at 63.5) premium the June 2016 contract.

Grains: Dec. Corn is currently fractionally higher at 359’0, Jan. Beans 1’0 lower at 854’0 and Dec. Wheat 3’4 higher at 492’2. The long KC Mar. Wheat/short Chicago Mar. Wheat spread has narrowed 1’4 to 16.4 premiu the Chicago contract. We remain long Dec. Corn and are currently using a protective sell stop at 344’0 which we will raise to 353’4 should the market trade above 363’4. We have entered the KC/Chi Wheat spread with an objective even money on the spread, wanting the KC contract to gain on the Chi contract.

Cattle: Dec. LC closed out the week at 130.17 and Jan. Feeders at 154.10. Last Thurs. the market gave the opporetunity to take profits from recent longs above 134.00 or in the 1232.50 area if you used the recommended stop. I will now be looking to once again go long LCZ5 should the market trade below the 127.80 level.

Silver: Dec. Silver is currently 14 cents higher at 14.35 and Dec. Gold 10.00 higher at 1091.00. Given the tragic events in Paris I’m a bit surprised that these usually flight to safety commodities are not acting a bit better. We remain long but cautious.

S&P's: Dec. S&P’s are currently 3.75 higher at 2022.25. The S&P and DOW indices are both tradeing below their 200 day moving averages, 2033.00 and 17590, levels closely watched by fund managers. I will be a seller on rallies above 2033 with a protective buy stop initially at 2059.00.

Currencies: The Dec. Euro is currently 10 lower at 1.0731, the Yen 26 lower at at 0.8125 and the Pound 35 lower at 1.5192. I am willing to trade the Euro from the long side below the 1.0650 level and the Yen also from the long side from current level, both with a 150 bpoint initial risk.