Financials: Sept. Bonds are currently 1'08 higher at 151'18 and the 10 Yr. Notes up 19 at 134'24. Quite a story this morning as to market volatility. Jobless claims were up 8,000 vs. expectations of up 13,000. The initial reaction was to the downside as the Bonds broke from the 150'00 level to 149'16. Keep in mind that the Bonds were already trading a bit lower in response to the ECB and the Bank of England keeping rates unchanged. The market then awaited comments by the ECB's Mario Draghi who did not deliver any encouraging news, i.e., economic growth in the Euro area remains weak causing heightened uncertainty. The market did not take this well rallying 2'00 to current levels in a flight to quality and safety. Despite dips below the 150'00 level over the last week, the market still needs a close below the 150'00 level to generate a sell signal. Support remains at 150'01 and resistance 152'26.
Grains: Dec. Corn is currently 7'0 lower at 793'6, Nov. Beans 16'4 lower at 1612'4 and Dec. Wheat 9'4 lower at 884'2. Yesterday Dec. Corn tested support in the 784'0 area (the low was 781'2) amid selling attributed to both rain in Nebraska and profit taking. If you went long on yesterday's break either take profits or use a protective sell stop in the 788'0 area. The long term trend remains up with only a close below the 740'0 level to negate the prevailing trend at this time. The current upside objective is the 840'0 area. I am still looking at the action in the Beans as a possible top.
Cattle: Oct. LC is currently 25 lower at 123.85 and Oct. FC 50 lower at 141.85. Over the last couple of sessions FC have gained slightly on LC as feed grain prices have somewhat retreated from record highs. I will be a buyer in Oct. LC below the 122.50 level with a 2.00 risk. Oct. FC remain range bound between 138.00 and 144.00. For the moment I will be looking to trade the FC from the long side on breaks.
Silver: Sept. Silver is currently 38 cents lower at 27.15 and Dec. Gold 12.00 dollars lower at 1595.00. We remain lightly long Silver. Discouraging comments by the ECB's Mario Draghi caused a rally in the Dollar, hence, a break in metals. Treat Dec. Gold as a trading affair between 1585.00 and 1625.00.
S&P's: Sept. S&P's are currently 10.00 lower at 1360.00 after trading as high as 1383.00 in response to a constructive Weekly Jobless Claims Report. The market broke on comments from Mario Draghi to current levels. The 1369.00 level of support (see Tuesday's Report) has been broken putting support now in the 1348-1353.00 area. Resistance has been lowered from 1387.50 to the 1374.00 area. My bias remains to the short side of the market on rallies.
Currencies: As of this writing the Sept. Euro is trading 35 lower at 1.2212. Comments from the ECB initially pushed the market as high as 1.2413 before breaking to as low as 1.2179. Earlier in the week I recommended treating the Euro as a trading affair between 1.2225 and 1.2475. With today's low below the 1.2200 level I am once again concerned about downside potential and will move to the sidelines for the moment.
Monthly Unemployment Report tomorrow (Friday) morning.
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