carleygarner
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March 22nd, 2010
Another directionless Treasury session
It is getting more and more difficult to write commentary on a market that refuses to show signs of volatility. Adding to the boredom, there weren't any economic releases to start out the week and there didn't seem to be many speculators (light volume).
There was a substantial Treasury bill auction but it was merely a speed bump ahead of tomorrow's $44 billion in 2-year notes, $42 billion in 5 year notes and $32 billion in 7-year notes later in the week.
Tomorrow we will get news of existing home sales and the FHFA's home price index, but the potential market movers will be Wednesday's durable goods orders and new home sales then Friday's GDP figures.
The chart is quiet, but that doesn't mean that the bond rally is over. Light volume, event risk and what are likely looming stops overhead could trigger a quick, but surprisingly swift up-move. However, seasonal tendencies are pointing lower and small specs have gone long (they will be quick to sell to cover) so we prefer a strategy of selling rallies.
The June 30-year bond futures has resistance near 118'17 then again near 119. Support lies at, 117'03 and then again near 115'28. Note traders can look at similar upside levels at 117'22 then again at 118'01 with support at 116'08 and then again near 115'17.
If you are really, really bored...a lottery ticket play would be to buy volatility. If you use the April options that expire on Friday, you can buy the 119/117 strangle for about $250 plus transaction costs.
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.
There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
Another directionless Treasury session
It is getting more and more difficult to write commentary on a market that refuses to show signs of volatility. Adding to the boredom, there weren't any economic releases to start out the week and there didn't seem to be many speculators (light volume).
There was a substantial Treasury bill auction but it was merely a speed bump ahead of tomorrow's $44 billion in 2-year notes, $42 billion in 5 year notes and $32 billion in 7-year notes later in the week.
Tomorrow we will get news of existing home sales and the FHFA's home price index, but the potential market movers will be Wednesday's durable goods orders and new home sales then Friday's GDP figures.
The chart is quiet, but that doesn't mean that the bond rally is over. Light volume, event risk and what are likely looming stops overhead could trigger a quick, but surprisingly swift up-move. However, seasonal tendencies are pointing lower and small specs have gone long (they will be quick to sell to cover) so we prefer a strategy of selling rallies.
The June 30-year bond futures has resistance near 118'17 then again near 119. Support lies at, 117'03 and then again near 115'28. Note traders can look at similar upside levels at 117'22 then again at 118'01 with support at 116'08 and then again near 115'17.
If you are really, really bored...a lottery ticket play would be to buy volatility. If you use the April options that expire on Friday, you can buy the 119/117 strangle for about $250 plus transaction costs.
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.
There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
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