Moderately bearish data and failure for stocks to sharply correct following yesterday’s impressive gains, left bonds and notes vulnerable. Nonetheless, the long bond found support near our mid-118 target and reversed higher.
All else being equal, this would bode well for the 30-year bond in the coming days. However, the technical set-up in the 10-year note is highly suspect. Our analysis suggests that the note could move lower by as much as a handle. If this is the case, bonds will be sure to follow. On the other hand, it could be bonds that lead the market higher….confusing, I know.
For now; we are going to assume that the bonds are leading notes and that the overall price action in the coming days or weeks could be higher overall. That said, we cannot rule out a test of the 118’07 area in the long bond.
In yesterday’s newsletter we boldly predicted a reversal in all of the financial markets (Treasuries, stocks and currencies). Today wasn’t the day, and tomorrow might not be either but we feel like such a scenario could happen by as early as next week.
Yesterday afternoon, our clients were advised to sell puts against a possible Thursday plunge. We recommended to sell the December T-bond 112 and 113 puts for 20 and 26 ticks respectively, or about $312 and $406 before commissions and fees.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
October 15 – Yesterday afternoon, our clients were advised to sell puts against a possible Thursday plunge. We recommended to sell the December T-bond 112 and 113 puts for 20 and 26 ticks respectively, or about $312 and $406 before commissions and fees.
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Senior Analyst / Commodity Broker
Local : 702-947-0701
*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.