Increased Iran/Saudi tensions.

Increased Iran/Saudi tensions. Disappointing Chinese manufacturing Data. Equities, Dollar lower, Bonds & Metals Higher.

Financials: March Bonds are currently 25 higher, 10 Yr. Notes 13 higher at 126’10 and 5 Yr. Notes 9 higher at 118’19.2. Markets are experiencing a “flight to safety” this morning in light of the increased tensions between Saudi Arabia and Iran after the Saudi execution of an Irani cleric. Chinese manufacturing data points to a slowing economy causing a 7% drop in Chinese equities indices. We remain spread long 5 Yr. Notes/short 10 Yr. Notes and will make a decision in the next few sessions whether to continue holding this position,. We also are holding the long June 2016/short June 2017 Eurodollar spread.

Grains: Mar. Corn is currently fractionally lower at 358’0, Mar. Beans 4’4 lower at 859’6 and Mar. Wheat fractionally lower at 469’2. I must note that with the weak Dollar this morning the Grains are putting on a disappointing performance. The long KC Mar.
Wheat/short Chicago Mar. Wheat is currently 3’0 against us this morning at 4’4 premium Chicago wheat. If this spread does not go premium KC in the next week I will probably liquidate. Stay tuned.

Cattle: Live Cattle currently look 25 lower after a lower close on Friday in spite of the Dec. going off the Board 280 higher at 135.80. Feeders closed strong but look a bit lower this morning. We remain short the Feb. and will cover on a 175+ point break if given the opportunity today. I feel that this market currently has support around 132.00 and resistance around 140.00 and will try to sell the combination (strangle) of the Feb. LC 132.00 put and 140.00 call for 375 points if the opportunity arises The strangle settled at 335.

Silver: Mar. Silver is currently 15 cents higher at 13.95 and Feb. Gold 10. Higher at 1070.2. We continue to hold a small long position and will be watching the recent lows of 13.62 in Silver and 1046.00 in Gold as support.

S&P's: Mar. S&P’s are currently 33.00 lower at 2002.75. Poor Chinese economic numbers have once again pushed this market below the 200 day moving average and looks headed for a test of the December low of 1983.25. I’m a seller on rallies oabove the 2015.00 level.

Currencies: As of this writing the Mar. Euro is currently 22 higher at 1.0908, the Yen 80 higher at 0.8412, the Pound 28 higher at 1.4762 and the Dollar Index 30 lower at 98.450. We remain long the Yen (either futures cor the Mar. 85 call) and short the Dollar Index. I am currently recommending to either take profits or use a protecive sell stop at break even levels.