Financials: As of this writing (6:30am) Mar, Bonds are 5 higher over night at 170’19 and up 1’27 for the week, 10 Year Notes down 1 at 137’16 up 19 for the week and the 5 Year note flat overnight and for the week at 126’00. Yields have slid a bit with the 2 year at 0.12% down 1basis point for the week, the 5 yr. down 4 for the week at 0.41%, the 10 yr. down 8 at 1.01 and the 30 yr. bond down 7 at 1.77%. Flight to safety amid a highly volatile equity market and a dovish Fed which left rates unchanged and expects only moderate growth in the near future and a higher Dollar helped boost treasuries to current higher levels. I now look to reenter these markets from the short side on rallies believing that a 1+ trillion stimulus package will eventually pass and will add to inflationary pressures.
Grains: March Corn is 8 cents higher overnight at 542’0 and up 12’0 for the week, Beans are up 12’0 overnight at 1387’0 up 3’0 for the week and Wheat down 1’0 overnight at 657’0 down 16’0 for the week. Continued Chinese buying of Corn and Beans rallied these markets from recent lows 2 weeks ago of 1298’o in Beans and below 510’0 in Corn to current levels of which in Corn is new contract highs. As I mentioned over the last two weeks, technically the bull market remains in tact. Continue to trade from the long side on breaks.
Cattle: April LC closed yesterday down 47 at 122.62 up 325 for the week and March FC down 140 at 140.07 up 285 for the week. A volatile feed grain market added to already high volatility in this market. The weekly price movement stated here hides the fact that Feeders are 400 points off of the last weeks high and that nearby contracts of Live Cattle lost to deferred contracts but gained on the Feeders. I feel over the next few weeks we will see a reversal of heavy weight marketings to lightweight marketings as the cost of gain rises in response to higher feed grain prices.
Silver: March Silver is 9 cents lower overnight at 25.30 down 67 cents for the week. Last week we were looking for a dollar break to go long. The market cooperated trading as much $1.25 lower.
S&P: March S&P’s are 6.00 lower at 3738.00 down 116.00 over the last five sessions. The market has finally started showing signs of downsides correction. My near term objective of 3745.00 has been reached and surpassed. I will be looking to be a buyer.
Currencies: The Mar. Euro is unchanged at 1.2113 sand down 68 for the week, the Yen is down 18 overnight at 0.9588 down 72 for the week, the pound down 32 at 1.3658 down 70for the week and the Dollar Index up 9 at 90.73 up 63 for the week. I remain negative the Dollar but as stated last week I feel the DI is oversold and the field too crowded and expect more of an upside correction possibly to the 91.50 area. I level I will be willing to once again go short.
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