carleygarner
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July 26th, 2010
Marc Pearlman recently interviewed DeCarley's own, Carley Garner. Visit our website to listen.
Treasuries quietly lower
Bonds and notes spent most of the session in the red but it wasn't a complete bloodbath. Although the bears had a slight edge given the day's economic data, they weren't able to gain momentum.
New home sales are depressed but not as much as they were. According to the Department of Commerce, sales jumped 23.6% in June to 330,000 units despite expectations for 320,000 and a previous reading of 267,000 (revised number). Inventory data was also optimistic in that it showed a drop from 9.6 months to 7.6. Keep in mind that the May revision to 267,000 was done so on what was already the lowest level in history and median home prices ticked a bit lower in the same period. The news isn't necessarily reason to cheer but if stabilization continues we could avoid the double dip in housing that so many have been looking for and this could keep a floor under Treasury prices in the mean-time.
There was some chatter over strangle interest in the 10-year note. According to sources, the September 123 calls and the 121.5 puts were used as a means of going long volatility in Treasuries.
The Euro rallied to leave the dollar vulnerable but Treasury traders were focused on other factors. The fact that the dollar continues to fall with little reaction in bonds or notes suggests that the bond bulls aren't quite done with this market.
At the moment, it "feels" like trend-line support will hold. If this is the case, bonds should struggle to trade much below today's lows and will face strong support near 126.
* 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 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.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
*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.
Marc Pearlman recently interviewed DeCarley's own, Carley Garner. Visit our website to listen.
Treasuries quietly lower
Bonds and notes spent most of the session in the red but it wasn't a complete bloodbath. Although the bears had a slight edge given the day's economic data, they weren't able to gain momentum.
New home sales are depressed but not as much as they were. According to the Department of Commerce, sales jumped 23.6% in June to 330,000 units despite expectations for 320,000 and a previous reading of 267,000 (revised number). Inventory data was also optimistic in that it showed a drop from 9.6 months to 7.6. Keep in mind that the May revision to 267,000 was done so on what was already the lowest level in history and median home prices ticked a bit lower in the same period. The news isn't necessarily reason to cheer but if stabilization continues we could avoid the double dip in housing that so many have been looking for and this could keep a floor under Treasury prices in the mean-time.
There was some chatter over strangle interest in the 10-year note. According to sources, the September 123 calls and the 121.5 puts were used as a means of going long volatility in Treasuries.
The Euro rallied to leave the dollar vulnerable but Treasury traders were focused on other factors. The fact that the dollar continues to fall with little reaction in bonds or notes suggests that the bond bulls aren't quite done with this market.
At the moment, it "feels" like trend-line support will hold. If this is the case, bonds should struggle to trade much below today's lows and will face strong support near 126.
* 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 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.
Flat
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
*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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