Financials: Mar. Bonds are currently 10 lower at 142’24 and Mar. 10-year Notes are 3 lower at 131’08.0. This morning: Jan. Housing Starts were down by 8.5% vs. expectations of -3.1%. PPI was up 0.2% vs. expectations of a rise of 0.5%. We were stopped out of any remaining long positions in Mar. Bonds from the 142’19 area when the markets traded through our protective sell stop at 143’06. Later today: Minutes from the last FOMC meeting. Support is currently 142’08 and resistance for the near term is at 144’06. I continue to have a long term bias to the short side of the market but feel this market is entering oversold territory. For the very short term I will be a buyer at support with a stop at 141’30. Next week I will be quoting and trading June contracts.
Grains: Mar. Corn is currently 2’2 higher at 697’4, Mar. Beans 17’2 higher at 1487’4, Mar. Wheat 3’2 higher at 735’4 and Dec. Wheat 2’4 higher at 765’6. We remain long out-of-the-money call spreads in Dec. Wheat. Yesterday through this morning Beans have experienced a nearly 50 cent rally on surprisingly strong demand from China. Support for Mar. Beans is currently 1452’0 and resistance 1500’0. Watch for news on S. American growing and harvest conditions. I am still interested in going long Mar. Corn in the 680’0-685’0 area or July Corn in the mid 650’s if the market allows. There is only one week until first notice day on Mar. contracts.
Cattle: Apr. LC are currently 25 lower at 129.25 and Mar. FC 65 lower at 142.52. Markets continue in a down trend. Treat Apr. LC as a trading affair between 127.50 and 130.50. Mar. FC should show support below the 140.00 level. One week until first notice day for Mar. contracts.
Silver: Mar. Silver is currently $0.35 lower at $29.06 and Apr. Gold is $14.00 lower at $1,590.00. We continue to hold a small long position in Silver. As has been recommended in the past, I like the idea of having Silver as an investment of 6-10% of an overall portfolio. At $29.00 a mini-Silver contract (1,000 ounces) has a value of $29,000.00.As for speculation: It’s time to start looking for buying opportunities if Silver trades below the 28.00 level. Apr. Gold is approaching support in the $1,580.00 area. If you are inclined to try to pick bottoms in this market use close stops.
S&Ps: Mar. S&Ps are currently 0.50 lower at 1527.50. For those of you keeping track: I have been stubbornly short futures and short the 1480 puts. Currently the loss on the futures is $1,700.00 and the profit on the short puts $300.00. I admit defeat for the moment and am liquidating the positions today. Support is currently 1513.00 and resistance 1530.00.
Currencies: As of this writing the Mar. Euro is 5 lower at 1.3385, the Swiss unchanged at 1.0836, the Yen 31 lower at 1.0673 and the Pound 94 lower at 1.5308/ If you remain short the Euro, lower your protective buy stop from the 1.3490 level to 1.3450. If the market trades below the 1.3310 level, lower your stop to 1.3410.