Oil fell threw $70 today as overall fundamental weakness and China dropping overnight led to the significant pullback.  There is the $68 50day moving average that is the next support but overall the picture seems weak right now.

We are seeing that banks closures will continue to be problematic. From the second quarter of 2009 it has been reported that troubled banks rose from 305 to 416 in the second quarter. Secondly, I have said this before and it may start to be a reality. The consumer is not spending as much and it is affecting major retailers.  If people are over leveraged as is and are nervous we could see hundreds of retailers fold. What does this mean? It means that mini corrections may occur and this could happen for months or even years. No outstanding news or economic data has been announced that demands the market’s bullish behavior.

Im off the floor today to see how the crop is finishing. So far moving through Eastern Iowa i see a tremendous amount of standing water. I do admit there has been a lot of rain in the past 48 hours, but lacking any heat, there is a growing chance for root rot. With standing water and cool temps, this crop will not finish off as well as expected. This is a much bigger issue for beans than corn with the latter all but set. Beans still need to fill out to meet growing expectations. Continue to look for a corn yield at or above 160 Bu/Acre with beans struggling to get above 41.
I will be back tomorrow.

Crude Oil shot above $73 a barrel today as Ben Bernanke told the us that the recovery period has allready started and that the market has bottomed out.  We will se if inventories have any affecton the price of Crude as this has been all dollar and eqity driven.  Last week stockpiles fell for the frist time in 4 weeks wih an enormous 8 million draw.

The negative pressure prices have experienced have resulted in turning bull markets in coffee and cotton into bears. Both have had sizable prices drops since last Thursday and while you might consider those two markets due for a bounce, what if one doesn’t happen? Uncomfortable longs ought to be seeking to use any bounce to get out. If prices cannot firm then they may abandon longs anyway. Shorts, while they may be inclined to cover on strength would be sure to re-sell on further weakness.

So, Ias you can tell I ‘m not thrilled about being long either of those two markets, the very same which I strongly felt held upside opportunities not more than a week ago. For more on why, see my morning comments, Jurgens

If one bases trading on the mindset of consumers the market will continue to do a head fake. Consumers are scared and will take a long time to come out of hiding. Employment numbers are still rising like I have mentioned for months and will reach 10%. This means more foreclosures and more families that will need government assistance. A slow rise on the S&P and the dollar is what our country needs! The S&P has a range of 982-1017 creating a gap of uncertainty and steady movements. Are we going to see a bigger correction? There is a possibility that a 15%-20% correction could take place. A second wave of lay-offs, foreclosures, bank closings, and market consolidation may occur; like a mini relapse.

The USD has now strengthened and bounced off the resistance of the $1.4450 level in trms of the Euro/USD…This led to Gold selling off from $972 to $945.

Well we finally had a big down day in the equity markets  with the Dow down more than 75 points.  This led to Oils slide from $70 to $67 as the USD also strengthened

Following the WASDE report the beans fell apart and corn held ground. Now everything is rallying ith support gained from crude and equities.

The sentiment is this; the biggest yield we can possiblly see in corn was seen this morning and the trade feels fair value is at $320 basis Dec. In beans, fundamentalists understand the crop is made in August and the weather forecast looks benign to bearish.

Volatility has been hammered as expected with CU losing 10% and SX losing 3.5%.

Overall a disappointing response for bulls with bears takingiton the chin onthe way back to the upside.

Could this be it? Could this be the end of the recession? Is it okay to jump back in? First off, it is never safe to jump in but we know that we must play the game to win. I am fearful of stagflation over the next 5 years and possible inflation hitting us like Mike Tyson in his early years as heavyweight champ. A long term investor should have been back in the market months ago. However, day traders in the past week would have lost money trading the S&P on ticket charges because there was very small movement. Unemployment numbers were awesome and should bolster a nice bullish movement. I mean 247,000 jobs lost and an unemployment number of 9.5% is definitely a step in the right direction. Are we out of the woods? The dollar is getting weaker which scares me! The US Dollar Index is trading 78.315 while the Euro has held its own at 1.43 for some time now. Between you and I it would be nice to see the Euro get crushed and the dollar go up like dynamite.