Financials: Dec. Bonds are currently 5 lower at 149’13 and the 10 Yr. Notes 2 lower at 133’08. Retail Sales this mornig were up 1.1% vs. average expectations of up 0.7% rallying the Bonds off of their low of 149’00. As mentioned last week my bias is somewhat negative and for short term trading purposes I am a seller on sharp rallies. Support continues at 147’09 and resistance at 149’26 (despite last Friday’s high of 150’07).
Grains: Dec. Corn is currently 10’0 lower at 742’6, Nov. Beans 27’4 lower at 1495’0 and Dec . Wheat 4’0 lower at 852’6, with the break over the last two sessions being attributed to lackluster export sales. As mentioned in my last “Report” (Thursday) I wanted to treat the market as a trading affair buying support and selling resistance. The market gave the opportunity to be a seller in the 770’0 area for Dec. Corn and both Wheat and Beans also afforded selling opportunities on strong rallies after the Crop Report. If you went short I recommend covering your positions and standing aside for the moment. Of note: Wheat and Beans have given sell signals trading below levels established in mid July. I am lowering support to the 725’0 level in Dec. Corn, 1480’0 in Nov. Beans and 840’0 in Dec. Wheat.
Cattle: Dec. LC closed Friday at 125.50 and Nov. FC at 144.22. Both of these markets are well below trading levels prior to Thursday’s Grain Report reflecting higher feed grain prices. Now that the Grains have given up most of their recent gains I expect a modest recovery in Feeder Cattle. For the moment I am looking to treat Dec. Cattle as a trading market between 124.00 and 127.50.
Silver: Dec. Silver is currently 50 cents lower at 33.15 and Dec. Gold 15.00 lower at 1745.00. We remain long Silver despite the recent 2.00 dollar break, keeping in mind that we are long from the 27.00 level. Support is currently the 32.00 level, an area where I will consider adding to the position with a close stop on the additional contract. I will be looking to be a buyer in Dec. Gold below the 1720.00 level if the market allows.
S&P's: Dec. S&P’s are currently 6.00 higher at 1427.50. My bias remain negative. Over night near term support of 1423.00 was breached with the market making a new recent low of 1416.50 before rallying to current levels on news that Spain may have enough money in their banking system for the time being and may not need further infusions until the New Year. That being said, I will be a seller in the 1438.00-1441.00 area. We have liquidated all Oct. put options and remain long out of the money put spreads for November expiration.
Currencies: As of this writing the Dec. Euro is currently unchanged at 1.2965, the Swiss unchanged at 1.0729, the Yen 56 lower at 1.2708 and the Pound 7 lower at 1.6063. I will be a buyer in the Euro below the 1.2650 level and a seller above the 1.3150 level. At current levels I am on the sidelines.
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