Bonds Higher, S&P's Lower, Silver Higher

Financials: Sept. Bonds are currently 13 higher at 136’03, 10 Yr. Notes 7.5 higher at 124’20 and 5 Yr. Notes 4.2 higher at 119’00. The 134’08 support level in Bonds has held with the recent low being 134’11, levels from which we had recommended trading from the long side of the market. We are now nearing resistance in the 136’18 area where I am willing to switch my bias from being a buyer on breaks to that of being a seller on rallies. Later this week we will have the release of the minutes from the latest FOMC meeting which should set the tone for the next few trading sessions.

Grains: Dec. Corn is currently fractionally higher at 406’4, Nov. Beans 1’6 lower at 1123’6 and Dec. Wheat 2’0 higher at 582’4. Yesterday we saw these markets open lower due to good growing conditions over the holiday weekend “Rain makes Grain”. We were stopped out of a recent long in Dec. Corn when the market traded through the 408’0 level. Yesterday’s break gave us an opportunity to go long Nov. Beans and we will use a protective sell stop at 1108’0. Should the market rally above the 1133’0 level either take profits or raise your sell stop to 1113’0. We have been looking to go long Dec. Wheat in the mid 580’s, the market now there and I am willing to risk 15’0.

Cattle: Live and Feeder Cattle continue to rally. Aug. LC are currently slightly lower at 154.87 and Aug. FC slightly lower at 217.97, both of these markets about 150 points below yesterday’s early session highs. We remain long the Aug. LC 142.00 put purchases for 22 points.

Silver: Sept. Silver is currently 17s higher at 21.19 and Aug. Gold 7.00 higher at 1324.00. We remain long Silver. I am a buyer on sharp breaks in Gold for short term trades.

S&P's: Sept. S&P’s are currently 3.00 lower at 1968.00. The market is showing only slight weakness as traders reanalyze recent employment situation numbers and digest speculative comments that sales at Walmart may be down. For the near term I am taking a combination position of short futures and short the Sept. 1900 put.

Currencies: As of this writing the Euro is 14 lower at 1.3598, the Swiss 10 lower at 1.1192, the Yen 15 higer at 0.9837 and the Pound 13 lower at 1.7109. We continue our short bias in the Euro. I am also willing to trade the Pound from the short side on sharp rallies.