carleygarner
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February 18th, 2010
Visit www.ATradersFirstBookonCommodities.com for info on Carley's latest book!
Treasuries dip on hot inflation numbers
A hot CPI reading and rumors of a large seller in the German bunds forced Treasuries lower. The long bond posted its highest yield since the summer of 2008 (according to CNBC, I didn't do any fact checking but it seems accurate).
The day's data seemed to side with Treasury bears. The Philly Fed was reported at 17.6; a considerable improvement over the previous 15.2. Also, the Producer Price Index came in at an increase of 1.4%, nearly double analyst estimates and a notable increase over the previous month's .4%.
Techies are chattering about a break of support in Treasuries that could lead to a much larger slide. However, we feel like a bulk of the selling has already been accounted for...for now anyway. In our opinion, it seems like traders were simply caught long into the data and sell stops were elected. The recent probe lower might turn out to be a bear trap and the shorts that sold into the lows might be quick to cover.
Tomorrow's CPI data will be more telling than today's inflation numbers. However, given the size of the miss the market has likely priced in the inflation scare. If so, look for counter-trend trade that brings the March T-bond back to the 118 area by the middle of next week and the T-note to prices as high as 118. In the meantime, support in the long bond lies just under 116 and in the note just under 117.
Our clients were recommended to sell April bond 111 puts for 23/24 today.
* 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.
2-18 - Our clients were recommended to sell April bond 111 puts for 23/24 today.
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701
www.DeCarleyTrading.com
www.ATradersFirstBookonCommodities.com
*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.
Visit www.ATradersFirstBookonCommodities.com for info on Carley's latest book!
Treasuries dip on hot inflation numbers
A hot CPI reading and rumors of a large seller in the German bunds forced Treasuries lower. The long bond posted its highest yield since the summer of 2008 (according to CNBC, I didn't do any fact checking but it seems accurate).
The day's data seemed to side with Treasury bears. The Philly Fed was reported at 17.6; a considerable improvement over the previous 15.2. Also, the Producer Price Index came in at an increase of 1.4%, nearly double analyst estimates and a notable increase over the previous month's .4%.
Techies are chattering about a break of support in Treasuries that could lead to a much larger slide. However, we feel like a bulk of the selling has already been accounted for...for now anyway. In our opinion, it seems like traders were simply caught long into the data and sell stops were elected. The recent probe lower might turn out to be a bear trap and the shorts that sold into the lows might be quick to cover.
Tomorrow's CPI data will be more telling than today's inflation numbers. However, given the size of the miss the market has likely priced in the inflation scare. If so, look for counter-trend trade that brings the March T-bond back to the 118 area by the middle of next week and the T-note to prices as high as 118. In the meantime, support in the long bond lies just under 116 and in the note just under 117.
Our clients were recommended to sell April bond 111 puts for 23/24 today.
* 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.
2-18 - Our clients were recommended to sell April bond 111 puts for 23/24 today.
Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701
www.DeCarleyTrading.com
www.ATradersFirstBookonCommodities.com
*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.
