Unemployment numbers disappointing. Metals rally to new recent highs

Financials: Mar. Bonds are currently 1’03 higher at 164’11, 10 Yr. Notes 15.5 higher at 130’27 and 5 Yr. Notes 10 higher at 121’11. Friday’s Unemployment Report showed a disappointing increase in non-farm payrolls of 151,000, well below expectations of 188’000 pushing rates to new lows. Late last week we sold out of the long leg of the June 2016/June 2017 Eurodollar spread leaving us net short the June 2017 Eurodollars. We are losing 20+ points at this moment and will sit with the position for the time being. I am currently on the sidelines in Bonds and Notes try to quell my instinct to trade from the short side on rallies.

Grains: Mar. Corn is 1’4 lower at 364’0, Mar. Beans 3’6 lower at 863’4, Mar. Chi. Wheat 2’6 lower at 464’0 and Mar. KC Wheat 3’0 lower at 451’0. The long KC Wheat/short Chi.
Wheat is not behaving to my expectations and I will bge looking for a liquidating opportunity later this week. Over thwe last few months the spread has gone from 25’0 premium Chi. To even with thye KC and has backed off roughly 50% to 13’0 premium Chi. My expectations have been for the KC Wheat to eventually go premium KC. I am currently on the sidelines in other grains, but, will be looking to go long Corn below 358’0 or on a stop just above 375’0.

Cattle: On Friday LC closed 100+ lower and FC 300+ lower in nearby contracts. We remain spread long Aug./short Apr. with an objective in the 13.375 area, the spread narrowed by 80 points on Friday closing at 13.875.

Silver: Mar. Silver is currently 25 cents higher at 15.03 and Apr. Gold 25.00 higher at 1182.00. I remain long and recommend either taking profits or using a tight stop. I feel these markets are eventually going higher but starting to look overbought. That being saidI will be a buyer in Silver on a 40 cent break. Technically both metals appear to have rounded bottoms.

S&P's: Mar. S&P’s are currentlt 28.00 lower at 1847.25. If you remain short I recommend taking profits. We are near support, closing in on the Jan. 21st low of 1836.25, which I consider support. Resistance is currently 1876.50. For the near term I will trade this market from the long side until/if the 1836.00 level is broken. That being said, I will once again go short at resistance.

Currencies: As of this writing the Mar. Euro is currently 57 lower at 1.10980, the Yen 30 higher at 0.85940, the Pound 125 lower at 1.4374 and the Dollar Index 42 higher at 97.475. We have taken profits on short Dollar Index positions and long biased Yen positions (see Currency update Wednesday 2/3/2016). I am on the sidelines for the moment.