Have a Happy and Prosperous New year!!

Financials: Mar. Bonds are currently 3 higher at 153’12, 10 Yr. Notes 1 lower at 125’20 and 5 Yr. Notes 1 lower at 118’04.5. We continue to hold the long 5 Yr./short 10 Yr. Note spread and the long June 2016/short June 2017 Eurodollar spread. Over the last couple of sessions the 5 Yr/10 Yr. spread has narrowed by 9 points in our favor to 7’15 premium the 10 Yr. My near term objective is for this spread to continue to narrow to the 7’08 level at which point I will consider taken profits or at the very least determine a a price on the spread where I will have a “mental stop”, i.e. a level at which I will exit if the spread starts to widen.

Grains: Mar. Corn is currently 1’0 higher at 363’4, Mar. Beans 3’0 higher at 868’6 and Mar. Wheat 3’0 higher at 478’6. I remain spread long KC Wheat/short Chicago Wheat currently at 3’0 premium Chicago with the expectation that the spreade will eventually go premium the KC Wheat. I do want to note that the Grains had a nice rally off of recent lows mid session yesterday.

Cattle: Live and Feeder Cattle closed lower yesterday but are still 200-400 points higher since my last letter, dated 12/22/2015, of which I recommended the short side of Feb. LC above the 131.25 level. I am still short but will use a sharp break from current levels to cover the position and stand aside.

Silver: Mar. Silver is currently 5 cents lower at 13.88 and Feb. Gold fractionally higher at 1068.00. A break in Crude Oil and a strong Dollar are still dominating these markets causing sell offs because of deflationary fears. I must be honest and admit that this has been a poor year to be long and I stubbornly continue to hold a small long position feeling that the Dollar will eventually retreat.

S&P's: Mar. S&P’s are currently 5.50 lower at 2067.25. Treat as a trading affair.

Currencies: As of this writing the Mar. Euro is currently 15 lower at 1.0946, the Yen 8 lower at 0.8313 and the Pound 27 lower at 1.4804. I am still recommending the long side of the Yen on breaks (either futures or the Mar. 85.00 call). I am on the sidelines in the Pound trying to find a reason to go long.

NATURAL GAS: If you went long on my recommendation in the 1.85-1.90 area either take profits (currently at 2.25) or use a close stop.

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