Return of rhetoric by President Trump sent traders to Treasuries
|Financials: Sept. Bonds are currently unchanged at 154'23, 10 Yr. Notes fractionally higher at 126'11.5 and 5 Yr. Notes unchanged at 118'11.2. Saber rattling by N. Korea and return rhetoric by President Trump sent traders to the safety of treasuries over the last 48 hours. Add lowered expectations of less than 2% expected inflation rate to the mix gives me concern for current short positions in the 10 Yr. Note from 126'18 and the 5 Yr. Note from 118'10. I suggest using a close stop of 126'21 in the 10 Yr. and 118'18 in the 5 Yr.
Grains: Dec. Corn is 0'2 higher this morning at 386'4, Nov. Beans 5'0 higher at 978'0 and Dec. Wheat 1'2 higher at 488'2. Crop Production Report this morning at 11:00 a.m. Central. I will be a buyer in Dec. Corn below 372'0 and a buyer in Nov. Beans below 955'0 with an initial 15'0 cent risk.
Cattle: Live and Feeder Cattle continue to register high volatility while maintain an overall downtrend. Live Cattle are now in support levels not seen since last Apr. and Feeders at levels not seen since June. We have stuck our neck out and gone long Oct. LC in the 109.00 area and/or put on the long Oct./short Feb. LC spread in the 3.50-3.75 area premium the Feb. Support for Nov. FC is currently the 137.50 level.
Silver: Sept. Silver is currently 28 cents higher at 17.145. We were able to go long at last week's recommendation of the 16.28 area. Take profits!
S&P's: Sept. S&P's are currently 8.75 lower at 2464.25. I have been recommending treating this market as a trading affair between 2464.00 and 2484.00 for the last few weeks and will now alter that recommendation. Given the rise in rhetoric with N. Korea, disappointing auto sales and lack of inflation numbers consistent with Fed targets I want to be a seller on sharp rallies with a protective buy stop at 2486.50. Support is now 2446.50 (the 50 day moving address).
Currencies: As of this writing the Sept. Euro is 14 lower at 1.17620, the Yen 14.5 higher at 0.91340, the Pound 2 lower at 1.3017 and the Dollar Index 4 higher at93.470. I remain a buyer in the Dollar Index on breaks with a protective sell stop at 92.200.
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