Treasuries End the Week Mixed

Bonds and notes made an impressive attempt at a Friday rally, but the volume nor the news was able to support mid-session gains. There were absolutely no economic reports for traders to move on, making the highlight (or lowlight) of the day a speech by President Obama on healthcare.
There is a lot of supply coming down the tube. The Treasury will be auctioning $42 billion in 5-year notes on Wednesday, $32 billion in 7-year notes on Thursday and a boatload of bills on Monday. While supply in itself is bearish, the relentlessly strong demand has enabled auctions to be relatively bullish for Treasuries.
The near-term direction in Treasuries could be decided by stock trade. Although the negative correlation between the two asset classes has been disconnected as of late, the relationship seems to be revised by lower equities. Should the major stock indices struggle to maintain current values (as we think will be the case) the bond market could benefit from a temporary bout of short covering and buy stop running.
We are hoping for a little more excitement next week. The economic calendar lists existing and new home sales data, durable goods orders, GDP and Michigan Sentiment.
Both the 30-year bond and 10-year note futures fell a bit short of our original projections of the mid to high 118’s and near 118, respectively. We would like to see what Monday looks like, but our gut tells us that the rally might have a little more squeezing to do. For now, we are cautiously looking slightly higher.
* 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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