Wheat...Watch out the squeeze!!!

Wheat targets 1000 USD if 850 USD gets lifted. COT suggests that Net Shorts will increase their exposure in the upmove. Prepare for a sell when the shorts got slaughtered...

Gold/Silver ratio vs S+P500 warns!!!

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Rising Gold/Silver ratio warned/warns for lower equities!!! See chart attached
The ratio is moving up after building a bottom and warns for a weaker equity market in a time frame of 2 to 4 weeks....If 50 in G/S ratio is lifted Credits should also start to underperform after this fabolous rally
CAVEAT EMPTOR

Bund chart and thinking out loud!

With the ongoing mumble for an increase in the EFSF (which is more or less a done thing to me) spreads in Euroland see a further compression (Spain 14 bps tighter on the day) while Bunds hover around their yesterday's low. Short end in Euroland (including the belly) is heavily under pressure with interest rate hike phantasy (hawkish ECB from last Thursday) still the name of the game. In short we think the following: A proper increase in EFSF fund (in order to guarantee or lend real 440 bln € or even more) will avoid a further market intervention from the ECB to buy peripheral bonds! Therefore they can play their independence and price stability game and might even lift the repo by 25 bps as Germany could easily absorb this. On the other hand the EFSF is the "undercover lender of last resort" and buys Euro peripheral bonds (FED style) in order to compress spreads, take pressure from the EUR, squeeze out shorts and reduce existing funding worries for candidates like Portugal, Ireland or Spain. Therefore the interest rate level for the peripheral countries would be reduced or at least held constant. European banks/insurance houses could also be relieved from buying heavy sizes of €-govies and see a rally in their peripheral govie books. Following today's German DAX performance one can see that insurance companies and banks lead the market upmove - it might be that the big boys already took the above mentioned arguments into account!? The implications for Bunds are obvious - 122.08 (see attachement) would be the first target before 120 and lower. Caveat emptor...........