Durable goods and home sales pressure Treasuries

The day’s economic news wasn’t plentiful but it packed a punch. The better than expected figures on the health of the economy put pressure on Treasuries early in the day and the complex was unable to recover.
Headline durable goods orders were in with expectations at a negative 1.3% but it was the ex-auto number of 2.8% that impressed the markets. Coming into the day the consensus estimate for durable goods ex-auto was .7%. Even more impressive, new home sales were reported to be 411,000, above and beyond expectations of 330,000. That said, the spike in home purchases is likely the effect of “pull forward” sales compliments of the government tax credit. If this is the case, the numbers could look equally as bad once the subsidy expires.
Greece continues to garner headlines but the markets appear to be growing immune. Stocks were able to post gains in spite of what are said to be positive developments in Euroland and Treasuries lost the skip in their step.
We are looking forward to next week’s auctions. Another round of supply could keep a cap on the rally, yet overly strong demand might have the opposite effect.
Our expectations for a countertrend Friday became a reality and this leaves the market vulnerable to continued selling into the 116’06 price range. We are beginning to lose our bearish bias and return to neutral territory. After all, we have the Fed next week and potential volatility in stocks could overflow into fixed-income.
If you are following our short call recommendation, we will likely look for a place to exit (profitably) early next week. Stay tuned….(if you are interested in learning more about option selling, give us a call or send us an email).
Don’t forget to register for our upcoming webinar with SFO Magazine!! See our website (below) for details.
April 23 Bond
April 23 note
* 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.
April 22 – Our clients were advised to sell the July bond 121 calls for 22 or better, and were filled this morning on the rally.
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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