Coffee has been pulling back from the 140s and apparently has a philosophical issue at 130s. We have 2 straight XMD.

 

Sugar was flat with divergence on volume. Options are on the call side in a violent manner.

 

Agriculturals are down on the opening week dancing with the dollar.

 

Oil has been trading in a violent manner with real volume indicator above its 22d moving average. And nat gas has the same pattern. Possible the put signal is getting realized and specs are rolling over positions, one of them USO, specially since today it was scheduled it’s roll over on futures.

On Friday sell volume was dominant and today was continued excepting sugar and nat gas.

 

Buying signals on W [open to close]. graphically there might be a headandShoulders pattern.

 

Top commoditiy: energies -0.5%, worst: grains -1.5% the best contract was SM +1.41% and the worst of all O -5.66%

 

OIL:  Put open interest weighted is at 69 and the underlying is trading at 68. Also delta for adjacent strikes is weakening.

Dcarley bond report said:

 

The short end of the curve continues to suffer from selling pressure as safe haven cash is being reallocated to better paying assets. As it turns out, the T-bond was one of the beneficiaries.

The Fed was on the buy side again today. The central bank purchased $7.5 billion out of the $29.97 billion offered in maturities ranging from 4 to 7 years. This was an improvement over the last outing of similar securities. It seems as though some of the gains in the 30 year may have been due to rumors that the Fed may be making a move to expand their bond buying program. After all, thus far their attempts to keep rates low hasn’t materialized.

The U.S. dollar index moved moderately higher on the session to post what has been a solid rally from last week’s lows. If this continues to be the case, we feel like the index could see the mid-83’s in the coming week or so. Assuming this becomes a reality; bonds should follow the currency higher.

However, we all know how resilient the bond bears have been thus far in thwarting many of the usual inter-market relationships. Bonds and notes dropped as stocks rallied, but the turnover in stocks failed to spark Treasury buying. We feel as though the S&P could see 910 in the coming sessions but whether or not bonds will benefit, as would normally be the case, is yet to be seen.

It was a slow news day and tomorrow will be much of the same but things start to pick up on Wednesday. We will hear about the Fed’s Beige Book as well as the Treasury budget (which is important in terms of market supply of debt). Retail sales on Thursday will also be closely watched due to the consumers role in the potential recovery.

We see meaningful support in the September T-bond futures at 112’07 and resistance near 117’29. At the same time, support in the 10-year note should be found at 112’26 with resistance at 116’04.