Flight out of Safe Haven

Clearly the trend has been higher in the last four months as June 30-yr bonds futures have climbed 8 handles. This weeks consolidation just below the 135’00 level could signal an interim top. A future trader could institute shorts with stops above the recent highs. Another option would be a bearish option play with an objective of 132’00. June options expire on 5/23, the 133’00 strike currently costs $625 per and has a delta of 33%. Risk the entire premium. Those that are willing to trade the curve could opt for a NOB spread (short 30-yr bonds and long 10-yr notes 1:1).

I anticipate higher trade in the coming weeks in equities and think money will flow out of Treasuries. Use the Fibonacci levels in the chart below to help with price objectives.

30 Year U.S. Treasury Bond chart for April 17, 2014 - Safe haven

30 Year U.S. Treasury Bond chart for April 17, 2014

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As always, I’m here to discuss specifics and give guidance. Shoot me an email…Give me a call… you can reach me at: mbradbard@rcmam.com or 312-870-1653

Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.

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