Equities make new highs. Gold Rallies. Bonds mixed. GDP this week

Financials: June Bonds are currently 66 lower at 162’12, 10 Yr. Notes 3 lower at 129’09.5 and 5 Yr. Notes 2.7 lower at 120’17.7. On Wednesday 1st. quarter GDP will bew announced, currently estimated at 1.0% with many analysts predicting a touch below that number. We also have a 2 day FOMC meeting this week, of which I expect no change to rates with language once again talking about the possibility of a rate hike later in the year. Keep in mind that the market has already priced in a 15-25 basis point hike for Sept. as evidenced by the discount in the Sept. Eurodollar contract. The question remains as to whether the Fed. can/will raise rates while the rest of the global central banks are implementing quanitative easing as an economic stimulus. We remain spread long Sept.2015/short June. 2017 Eurodollar futures. Do you think Bill Gross is correct in his statement that the German 10 Yr. Bund is the short of the century? Consider going short the Bund with a protective buy stop above the contract high of 160.69, currently at 159.40. Keep in mind that this contract is quoted in Euro’s and be aware of the currency risk.

Grains: July Corn is currently 1’6 lower at 368’0, Junly Beans 1’0 higher at 971’6 and July Wheat 2’0 lower at 486’4. JulyCorn should find support between 353’0 and 363’0. We have been on the sidelines awaiting a break to go long Corn, we will be buyers on 5’0+ break.

Cattle: Live and Feeder Cattle closed out the week on a strong note gaining 400+ points from the weekly lows. We took profits Friday before the monthly Cattle on Feed Report which showed placements 4.4% above expectations. Technically the market looks positive but a sharply lower close could negate this, giving us reason to stand aside. The early calls are sharply lower. We remain long out of the money calls and/or call spreads in June Hogs.

Silver: July Silver is currently 19 cents higher at 15.87 and June Gold 11.00 higher at 1186.00. On Friday we commented on watching the 1183.00 level as possible support which was handily penetrated as the market traded below the 1175.00 level. I am still without a Gold position, that being said I want to favor the long side despite negative technicals, but will do nothing today. Support is currently 1163.00 and resistance 1192.00. We remain long Silver.

S&P's: June S&P’s are currently 4.25 higher at 2116.00. We remain short with a loss and have a protective buy stop at 2023.00. Earnings have been strong particularly among techs and we have probably overstayed our welcome.

Currencies: As of this writing the June Euro is currently 29 lower at 1.0846, the Yen 33 lower at 0.8383 and the Pound 49 lower at 1.5122. All of my near term expectations for the Euro (we have been buyers on breaks) have been realized and I am retreating to the sidelines. Over the last few weeks I have recommended the long side fo the Pound as a proxy for rising Crude Oil prices, I now recommend liquidating any long positions and standing aside.