New Ebola case sets back S&P's

New Ebola case sets back S&P’s. What you need to know about June 2015 Bonds!

Financials: Dec. Bonds are currently 20 higher at 142’11, 10 Yr. Notes 8 higher at 127’08 and the 5 Yr. Note 4 higher at 120’01.2. Need to know: On Wednesday June Bonds rallied sharply jumping more than 10’00 points to above 151’00, as the rest of the market was more or less unchanged. The June contract now carries a large premium to the Dec. and March contracts which under normal circumstances would be at a discount. Little known up until the contract was open (Wednesday was essentially the first trading day for this contract) the pricing for this contract reflected the change in the basket for the cheapest securities eligible for delivery against the Bond contract. The C.M.E. made the change to address the 5 year period of 2001-2006 when the government ceased issuing 30 Yr. Bonds. While the decision was announced ahead of time it was not widely known by traders who mistakenly mispriced the instrument early in the trading session. All that being said I am on the sidelines.

Grains: Dec. Corn is currently 3’4 higher at 363’2, Nov. Beans 3’6 higher at 997’0 and Dec. Wheat 9’0 higher at 535’6. I am willing to sell Nov. beans above the 1012’0 level with an initial 20 cent risk. Corn appears to be fairly priced in the 360’0 area and Wheat has followed through with a bit of upward momentum now that the 520-525’0 level has been penetrated. I will look to be a seller in Wheat on further rallies.

Cattle: Dec. LC are currently fractionally higher at 169.15 and Nov. FC unchanged at 236.70 after rallying more than 100 points yesterday. These markets remain highly volatile which is why we have confined ourselves to options for the time being, wanting to be involvedbut not wanting a lot of risk exposure. We continue to hold a combination of short LCZ 162 put/short LCZ 170 call/long LCZ 158 put and short LCZ 154 put. This position is not quite as complicated as it appears. Basically we do not feel the Dec. LC is going to go above 175.00 or below 154.00. There is a Cattle on Feed Report today which could show a slight increase in placements.

Silver: Dec. Silver is currently 11 cents higher at 17.27 and Dec. Gold 4.00 higher at 1333.00. We reman long and will be watching the 17.05 level in Silver and 1222.00 level in Gold as support.

S&P's: Dec. S&P’s are currently 5.00 lower at 1941.00. Yesterday late in the session the market broke from highs in the mid 1950’s following the breaking news of a new case of Ebola in NYC. We remain short from the 1920.00 area.

Currencies: We remain on the sidelines and will be looking to re-enter these markets next week. Stay tuned.