Financials: Mar. Bonds are currently unchanged at 143’12, 10 Yr. Notes 4 lower at 120’06.5 and the 5 Yr. Note 3.2 lower at 114’03,2. Yesterday’s CPI came in slightly higher indicating a perceived rise in inflation. Retail sales were slightly lower disappointedly well below expectations of a positive number. Most of the action has been in the 10 Yr. as yields rose and gained on the 30 yr. putting the yield curve at 25 basis points down from last weeks’ 31 points. The yield at its highest point for the 10 Yr. was 2.93. The question: Will the 10 Yr. go to a 3.00% yield? I feel these markets are entering oversold territory and I am on the sidelines. If you feel that rates are still going higher I suggest using out of the money put options which have limited risk.
Grains: Mar. Corn is fractionally higher at 367’4, Mar. Beans 1’0 higher at 1018’2 and Mar. Wheat 0’4 higher at 456’2. Beans gained about 30’0 due to good exports and drought conditions in the Plain states and S. America. I feel Beans have just about “run their course” to the upside and looking for opportunity on rallies to go short for short term trades. Support is currently 998’0.
Cattle: Live Cattle are up for the week with the Apr. contract now trading in the 125.50 area having tested 126.00. I remain short and feel that a gain in ready supply will trump an increase in demand.
Silver: Mar. Silver is currently 4 cents lower at 16.83, up 50 cents for the week. I remain long with an objective of 18.50.
S&P's: Mar. S&P’s are currently 10.00 higher at 2707.00. I am looking at the long Mar. 2650 put/ short Mar. 2600 put spread at 9.00 premium the long 2600 put.
Currencies: As of this writing the Mar. Euro is currently up 35 at 1.24975, the Yen up 45 at 0.94015, the Pound up 85 at 1.4089 and the Dollar Index 33 lower at 88.675. We remain long the Pound (either long call options or long futures). My objective is the 1.4500 area for the next few weeks.
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