Bonds Higher, S&P's Lower, Silver Higher

Financials: Sept. Bonds are currently 24 higher at 132’23 and the 10 Yr. Note 16 higher at 125’18.0. The June 2017/June 2015 Eurodollar spread has narrowed another 5 points and is currently trading at 208.5 premium the June 2015. My objective for this spread is in the 190 area. I will be looking to be a seller in the Bonds in the 133’15 area.
The market is currently in “risk off” mode and has benefitted from a flight to safety due to the prospects of military or other actions in the midEast, particularly Syria. This market rallies on uncertainty. Next week Dec. contracts will be considered the lead month.

Grains: Dec. Corn is currently 2’2 lower at 498’0, Nov. Beans 4’0 lower at 1385’4 and Dec. Wheat fractionally higher at 667’2. For the near term I suspect the market will hold most of yesterday’s gains given the hot forecast for the next few days. For the long term I look to be a seller on sharp rallies in Dec. Corn above the 510’0 level and Nov. Beans above 1420’0. Long hedgers who hold near the money calls might consider rolling them into higher strike prices. Producers (short hedgers) should consider buying out of the money puts for price protection.

Cattle: Oct. LC are currently 7 lower at 127.07 and Oct. FC 53 higher at 156.37.
Yesterday LC closed moderately higher (50-100) with deferred contracts gaining on nearby contracts as predicted by the Cattle on Feed Report placement numbers. FC on the other hand closed sharply lower with the Oct. contract falling the daily 300 point limit mostly in response to sharply higher feed grain prices. We remain short Oct. FC and recommend either takeing profits or lowering your protective buy stop from 162.30 to the 157.80 area. If the Feeder Cattle should start to trade lower this morning, lower your buy stop to the 157.15 level.

Silver: Sept. Silver is currently is currently 40 cents higher at 24.48 and Dec. Gold 26.00 dollars higher at 1419.00. Resistance on Sept. Silver is currently 24.65 and resistance on Dec. Gold 1428.00. I have missed this current leg to the upside and remain on the sidelines. Next week we will quoting Dec. Silver.

S&P's: Sept. S&P’s are currently 17.00 lower at 1637.25. Yesterday we covered the short leg of our put spreads. Needless to say this market is nervous about the uncertainty of the situations in Syria and Egypt, starting to break yesterday after administration’s noting that the use of chemical weapons etc. is unacceptable. For the moment we remain long what are now near the money puts and will wait and see if the market holds the recent lows near the 1631.00 level. My inclination is to once again sell a further out of the money put against our existing long put position.

Currencies: AS of this writing the Sept. Euro is currently 34 lower at 1.3340, the Swiss 24 higher at 1.0858, the Yen 126 higher at 1.0265 and the Pound 68 lower at 1.5507. The Sept. Dollar Index is currently 2 higher at 81.46. I am currently on the sidelines.