After an eventful overnight session, Treasuries closed the session near unchanged as traders look forward to tomorrow’s interest rate decision by the Fed.
As for today, there was little news and therefore little action. The Case-Shiller home price index dropped by a larger than expected 5.32% while consumer confidence data showed an uptick.
The 2 year note auction was a little on the weak side, but wasn’t enough to give the bears an edge ahead of tomorrow’s events. The Treasury issued $44 billion in 2-years at .88% with a 3.13 bid to cover and an indirect bid of 43.1%.
We were right about our assumption of another retest of the highs in the March T-Bond futures, but tomorrow’s call is a bit tougher. Our resistance area near 119’09 seems to continue to be valid, along with our mid-to-low 118 resistance in the note.
Support in the long bond comes in near 117’18 and then again near 116’011ish. If you are trading the note, look for support near 117’06 and then again in the mid-116’s.
Treasury Bond and Note Option Trading Recommendations
**There is unlimited risk in naked option selling.
January 20 – Our clients were recommended to sell call options this morning against the rally. Specifically, we like the idea of being short the March 30-year bond 121 calls. Fills were being reported anywhere from 23 to 26 ticks or $395 – $406.
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701
www.DeCarleyTrading.com
www.CommodityOptionstheBook.com
*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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