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
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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
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