British Pound makes multi year low, Equities Higher

Financials: Mar. Bonds are currently 11 lower at 166’08, 10 Yr. Notes 6 lower at 130’23 and 5 Yr. Notes 5 lower at 120’31.5. June 2017 Eurodollars are 3 lower at 99.090. During the last two weeks we have seen high volatility as Bonds rallied as high as 170’26 as rates went negative in Japan and several European countries in and effort to create more stimulus added to the flight to safety as Equities traded lower before recovering to current levels. I can’t say that this is new as one can look back to competitive currency devaluations in the 1920’s and 30’s and a Swedish experiment with negative rates a few decades ago. What is new is the amount of Central Banks carrying out this policy of negative rates. I believe that no one can say with any assurance how this will eventually work out as this “great experiment” is pretty much unprecedented. For the moment we remain short June 2017 Eurodollars and will look to cover should they trade below the 99.00 level.

Grains: Mar. Corn is currently 2’4 higher at 367’6, Mar. Beans 5’6 higher at 884’0 and Mar. Wheat unchanged at 461’4. The long KC/short Chi. Mar. Wheat spread has swung back our way over the last few sessions, currently trading at 3’0 cents premium the Chi. Wheat. I am liquidating this position. I am on the sidelines in Corn and Beans and will be looking at May contracts.

Cattle: On Friday FC closed moderately lower and LC slightly higher with nearby contracts gaining on deferred contracts. I am once again looking to go long Aug.LC/short Apr.LC above the 15.00 level (the spread closed at 15.10 premium Apr.). Friday’s Cattle on Feed Report showed the following: I would call the Report nuetral.

Silver: May Silver is currently 26 cents lower at 15.14 and Apr. Gold 19.00 lower at 1212.00. If you took profits last week, I believe it is time to reinstate long positions. If you remain long Mar. Silver it is time to roll into May contracts.

S&P's: Mar. S&P’s are currently 21.00 higher at 1935.50. This market is still trading well below the 200 day moving average (1999.06) but may have made a double bottom in the 1800.00 area. That being said I am a seller between current prices and the 1942 level and will look at Friday’s low in the 1898.0 area as short term support.

Currencies: As of this writing the Mar. Euro is currently 105 lower at 1.1036, the Yen 55 lower at 0.8834, the Pound 257 lower at 1.4106 and the Dollar Index 80 higher at 97.40. Of note: The Pound is on multi year lows as talk escalates about GB leaving the EU. I still like the short side of the Dollar Index and will reinstate a short position should this market rally above 97.90. I also still like the Yen and will look to reinstae a longh position should the market break below 0.8725.

NATURAL GAS: Once again I am going to try the long side on the Apr. contract.