FOMC this week

Financials: Mar. Bonds are currently 18 higher at 160’06, !0 Yr. Notes 7 higher at 128’24.5 and 5 Yr. Notes 4.5 higher at 120’05.7. I am currently on the sidelines awaiting this weeks FOMC meeting. I expect no change in rates and the Fed commenting on recent volatility, falling oil prices and the slowing economies of China and other emerging markets. Language pertaining to future, i.e. first quarter, rate hikes will liberally using the phrase “data dependent”for rate decisions. For the near term I will use the 10 Yr. Note as a short term trading vehicle between 127’22 and 129’14.

Grains: Mar. Corn is currently 1’2 lower at 368’4, Mar. Beans 3’0 lower at 877’4, Mar. Chicago Wheat 2’0 lower at at 480’4 and Mar. KC Wheat 0’4 at 473’0. We remain spread long KC/short Chi. Wheat. I will buy Mar. Corn on either a 10 cent break or a close above 375’0.

Cattle: Live and Feeder Cattle closed moderately lower yeaterday seemingly following the direction of crude Oil. I am looking at the Apr./Aug. LC spread as a traing vehicle selling the Apr./buying Aug. above 13.20 and buying Apr./selling Aug. under 11.70 premium Apr. I will also be a buyer in Apr. below the 126.00 level and a seller above 137’00. Friday’s Cattle on Feed Report was a bit negative showing more placements than expected.

Silver: Mar. Silver is currently 17 cents higher at 14.42 and Apr. Gold 9.00 higher at 1114.50. We remain long. These markets are now at short term resistance and a close above 14.46 in Silver could be an upside breakout.

S&P's: Mar. S&P’s are currently 4.00 higher at at 1874.50. Resistance remains in the 1895-1905.00 level and support in the 1830-1840.00 area. I am a seller on rallies and continue to have a bearish bias.

Currencies: As of this writing the Mar. Euro is currently 3 lower at 1.0843, the Yen unchanged at 0.8447, the Pound unchanged at 1.4256 and the Dollar Index 2 lower at 99.38. I remain short the Dollar Index and continue to hold long biase4d positions (either futures or options) in the Yen.