Counter-trend Friday

Today was a perfect example of a counter-trend Friday. The day’s data was relatively mixed but position squaring (short covering) ahead of the long weekend managed a moderate bounce.
The University of Michigan Sentiment was reported at 73.7, a bit lower than the previous and below estimates looking for 75. However retail sales beat the street’s expectations with an increase of .5%. I think that we will all agree that actions speak louder than words….and we would rather have consumers spending like they are confident than feeling good but clinching their wallets.
Another positive session for the U.S. dollar index likely helped entice some Treasury buying. Despite the week’s lousy auctions, the Treasury market has some underlying support in the form of a “stable by default” currency. However, fundamentals on the currency front seem to be getting near-term shaky. I have doubts that the Euro will be able to drop, and hold, below 135 on this particular move…and the U.S. dollar index should struggle a little above 81.
Going into Thursday, we were looking for the bonds to see the mid-116’s and they didn’t, but they did get close; after a low of 116’23 the market reversed higher. However, something tells us that bonds and notes haven’t seen the intermediate term lows. We see resistance in the 30 year T-bond near 118’07 and feel like the March futures will eventually see the mid 116’s. That said, the chart is a bit chaotic and we are going into a 3 day weekend; this leaves us less confident in our analysis than would normally be the case.
If you are trading the note, we see resistance near 118’20 and support at 117’11 and then again at 117’01.
* 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.
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
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.


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