Traders await any indication that the Fed will raise rates at Dec

Next report will be published on 16 November 2015

Financials: Dec. Bonds are currently 6 higher at 152’07, 10 Yr. Notes 3 higher at 126’05 and 5 Yr. Notes 2 higher at 118’26.7. The June 2016/June 2017 Eurodollar spread is currently at 67 points premium the 2016 contract. These markets have been more or less stagnent this week as traders await any indication or validation for assumptions that the Fed will raise rates at the Dec. FOMC meeting. Earlier this week we went long the 10yr/short the 5 Yr. which has hardly moved and is currently about 1.5 ticks ($49.00) against us. Next week I will be looking to liquidate this position, win, lose or draw. I will once again be looking to do a yield curve spread which will involve a ratio of short 2-10 Yr. Notes/long 3-5 Yr. Notes. To refresh your memory a bit, we successfully did this spread with a ratio of 3:5 in the past when the yield difference between the 5 and 10 Yr. went from 60 to 70 basis points. Recently the yield has been in a range of 59-63 and is currently at 61 premium the 10 Yr. I feel that the yield difference between these two instruments will once again widen.

Grains: Tuesday’s Grain Report showed that there is more Grain around than originally anticipated resulting in new recent lows for Corn, Wheat and Beans. Dec. Corn is currently fractionally lower at 361’4, Jan. Beans unchanged at 868’4 and Dec. Wheat 1’2 higher at 496’0. Now that Dec. Corn is below the 365’0 level I want to be a buyer on breaks with a stop at 344’0. The long KC Mar. Wheat/short Chicago Mar. Wheat spread has narrowed from 23’0 to 17’6.

Cattle: Yesterday Live and Feeder Cattle closed up the daily limit after suffering several days of sharply lower markets as these markets have shown concern over increasing stored meat inventories. As mentioned in my “Report” of 11/9/2015 I wanted to be a buyer in Dec. LC between 128.00 and 132.00. If you went long take profits above the 134.00 level or use a protective sell stop just below the weekly low of 127.42. If the vmarket trades above 132.25 today, raise4 your stop to 128.70.

Silver: Dec. Silver is currently 4 cents higher at 14.31 and Dec. Gold 2.00 higher at 1087.00. We are currently long and have replaced any longs liquidated above 16.20 in Silver and 1190.00 in Gold.

S&P's: Dec. S&P’s are currently 5.75 lower at 2063.25. Treat as a trading affair between 2056.00 and 2081.00.

Currencies: As of this writing the Dec. Euro is currently 2 higher at 1.0736, the Yen 2 lower at 0.8133 and the Pound 11 lower at 1.5182. Interest Rates continue to work lower in EC countries as the U.S. and Great Britian contemplate raising rates, I am overstating the obvious. I feel this has worked it’s way into the market and will try the long side of the Euro on a break below 1.0650.