Bank of Japan increases stimulus, Yen and metals slide, Equities surge, Bonds trade lower

Financials: Dec. Bonds are currently 14 lower at 141’04, 10 Yr. Notes 6 lower at 126’14 and 5 Yr. Notes down 3 at 119’16. Early this morning the Bank of Japan announced it would increase it’s Bond purchases by more than the equivalent of 780 billion dollars (quantitative easing) in an ceffort to stimulate their economy and fight deflation. The U.S. treasuries broke slightly compared to the rally in the Dollar and glodal equities. Trat as a trading affair between 140’06 and 142’29.

Grains: Dec. Corn is currently 1’0 lower at 373’0, Nov. Beans 1’2 higher at 1027’0 and Dec. Wheat 3’0 lower at 533’0 If you went short Dec. Corn above 378’0 either take the small profit or use a buy stop just above the overnight high of 375’0. If you went short Nov. beans above 1035’0 (see Report from 10/29/2014) either take profits or use a buy stop at 1042’0.

Cattle: Both Live Cattle and Feeder Cattle posted 100+ point gains yesterday as the Oct. contract (which expires today) traded above 171.00. We still have the combination of short the 162/170 strangle and long the 158/154 put spread now at a small profit.

Silver: Dec. Silver is currently 50 cents lower at 15.91 and Dec. Gold 25.00 lower at 1173.00 falling sharply even after yesterday’s sharp drop. The market apparently is more concerned with deflation than being a safe haven during global turmoil. I’m liquidating my metals positions and standing aside for the time being as I’m obviously out of touch. Mea Culpa!

S&P's: Dec. S&P’s are currently 21.00 higher at 2009.50, rallying sharply overnight in response to the increased Japanese stimulus package. My thoughts are that the trade must believe this will encourage EU and others to increase stimulus, mimicing action taken by the U.S. three years ago. Like the metals I’ve been trading this market from the wrong side over the past two weeks and have given back most of the profits from being short during the mid month correction. I’m heading for the sidelines.

Currencies: As of this writing the Dec. Euro is currently 53 lower at 1.2563, the Swiss 49 lower at 1.0414, the Yen200 lower at 0.8998 and the Pound 9 lower at 1.5988. The dollar is higher given action taken by the Bank of Japan.