Financials: Dec. Bonds are currently 19 lower at 130'04. The Durable Goods Report this morning showed an increase of 3.3% versus expectations of 2.5%. On the surface this looks pretty good, however, if you strip away the increase in transportation the figure comes in at -0.8%. Since my last writing the market has traded below the 130'25 level making a low this morning before the report of 129'21 establishing a new level of near term support. With the expected quantitative easing over the next few months of the Fed purchasing between 500 billion to 1.5 trillion dollars worth of Bonds and Notes I am inclined to look for trading opportunities from the long side on breaks below the 129'20 level. Near term resistance is currently 132'08. We remain long out of the money puts on the June 2012 Eurodollars.
Grains: Yesterday Beans closed 1 cent higher, Corn 2 higher and Wheat 18 higher. Over night Beans were 12 lower, Corn 4 lower and Wheat fractionally lower. At the moment I am on the sidelines and respecting the long term trend which remains up. Near term support for Dec. Corn is the 555'0 level and near term support for Jan. Beans the 1180'0 area.
Cattle: Yesterday Live Cattle closed slightly to moderately lower depending on the contract month. Feeder Cattle closed slightly lower to slightly higher depending on the contract month. Over night the markets traded slightly higher. Producers of Feeder Cattle should be looking at the recent rallies as an opportunity to once again establish hedges in deferred contracts. Producers of finished (Live) cattle should avoid using futures as hedges and be looking at option strategies as I feel deferred Cattle could still have a ways to go on the upside.
Silver: Dec. Silver is currently 19 cents lower at 23.64. I continue to remain on the sidelines awaiting a break below the 22.25 level to re-establish long positions. For those of you are extremely bullish consider the March $30/$35 call spread which is currently trading at about 25 cents ($1250).
S&P's: Dec. S&P's are currently 7.00 lower at 1175.75. Earlier in the week the market made a high of 1193.00 establishing a new level of resistance. Support is currently 1156.00. I am going to respect the prevailing trend which is up and only recommend treating this market as a trading affair for the moment between the 1164.00 and 1184.00 levels. I feel this market needs a close below the 1145.00 level to generate a sell signal.
Currencies: As of this writing the Dec. Euro is 22 lower at 1.3818, the Swiss 14 lower at 1.1033, the Yen 4 lower at 1.2266 and the Pound 5 lower at 1.5822. We remain long out of the money puts in the Yen which currently have little value left to them. I still feel that the Euro is over valued but will look at it as a trading market between the 1.3625 level and 1.4075 with a bias to the short side of the market recognizing that if the recent high of 1.4156 level is penetrated this market will probably be headed higher.
Senior Market Analyst, Price Futures Group
Publisher, Nemenoff Letter
Contact: 888.908.4310 | firstname.lastname@example.org