carleygarner
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April 6th, 2010
Join us on April 8th for a free webinar with PFG on "Demystifying Treasury Futures": http://www.pfgbest.com/webinar/eventSummary.asp?skey=332215675
Auctions, auctions, auctions
Supply concerns and pessimism over this week's auctions kept a cap on Tuesday's technical rally. The only news for the market to look forward to was the release of the March FOMC minutes and the issuance of $40 billion in 3-year notes. Trade spent much of the day grinding in a narrow range ahead of the events.
The note auction turned out to be a relative success with solid demand for the securities. The bid to cover was 3.10, better than the previous 2.83 and indirect bidders accounted for 52.25% of the participation.
The Fed's Beige book didn't offer many surprises. The panel believes that inflation risk are to the "upside" but it would be "subdued". They are also anticipating high rates of foreclosures and view job creation is "essential" to a lasting recovery.
Speculation in the Treasury futures market can be complicated. There are an infinite number of factors influencing pricing, they are quoted in fractions and to many it is unclear as to what exactly what asset the contract is deliverable upon. If you want to learn about the basic mechanics of the Treasury markets, come and learn with us (for free) on Thursday (see registration link above).
We are sticking with yesterday's analysis:
The futures look weak to us, and therefore we are looking for moderately lower prices. However, the lower prices go the more the odds favor a technical bounce. We will be bullish the 30-year bond just under 114 (revised a bit lower from last week) and we begin to like the upside in the 10-year note in the mid 114's.
* 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.
March 25 - Clients were advised to sell the June 110 puts in the 30 year bond for 24/25 ticks.
March 31 - Clients were recommended to buy back the 110 puts for 11 to lock in a profit of about $200 before transaction costs per contract.
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
http://www.DeCarleyTrading.com
http://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.
Join us on April 8th for a free webinar with PFG on "Demystifying Treasury Futures": http://www.pfgbest.com/webinar/eventSummary.asp?skey=332215675
Auctions, auctions, auctions
Supply concerns and pessimism over this week's auctions kept a cap on Tuesday's technical rally. The only news for the market to look forward to was the release of the March FOMC minutes and the issuance of $40 billion in 3-year notes. Trade spent much of the day grinding in a narrow range ahead of the events.
The note auction turned out to be a relative success with solid demand for the securities. The bid to cover was 3.10, better than the previous 2.83 and indirect bidders accounted for 52.25% of the participation.
The Fed's Beige book didn't offer many surprises. The panel believes that inflation risk are to the "upside" but it would be "subdued". They are also anticipating high rates of foreclosures and view job creation is "essential" to a lasting recovery.
Speculation in the Treasury futures market can be complicated. There are an infinite number of factors influencing pricing, they are quoted in fractions and to many it is unclear as to what exactly what asset the contract is deliverable upon. If you want to learn about the basic mechanics of the Treasury markets, come and learn with us (for free) on Thursday (see registration link above).
We are sticking with yesterday's analysis:
The futures look weak to us, and therefore we are looking for moderately lower prices. However, the lower prices go the more the odds favor a technical bounce. We will be bullish the 30-year bond just under 114 (revised a bit lower from last week) and we begin to like the upside in the 10-year note in the mid 114's.
* 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.
March 25 - Clients were advised to sell the June 110 puts in the 30 year bond for 24/25 ticks.
March 31 - Clients were recommended to buy back the 110 puts for 11 to lock in a profit of about $200 before transaction costs per contract.
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
http://www.DeCarleyTrading.com
http://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.
