The Bond Bulletin by Carley Garner

[carleygarner]

The Bond Bulletin By Carley Garner

August 25th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th.


Auctions on tap


Treasuries traded on both side of unchanged but ultimately moved the higher on the day. Despite overnight buying in bonds and notes, concern over the 2-year note auction and higher equities dragged government backed fixed income products into the red prior to the auction results. However decent demand, from both on and off shores buyers, seemed to have kept bonds in favor for now.

The Treasury auctioned $42 billion in 2-year notes with a draw of 1.119% and a 2.68 bid to cover; the indirect bidder take was 49.4%. The borrowing cost was a little higher than the Fed had expected but it seems as though investors are still hungry for the securities.

Consumer confidence beat the street's expectations. The index was reported at a 54.1, much higher than the previous 47.4 and the expected 47.9. Likewise, the S&P/Case-Shiller Home price index saw a less than expected decline of 15.44%. As has been the case, the not-so-bad data has enabled bonds and notes to creep higher but has hasn't provided any reason for a break out of the current trading range.

Markets don't like uncertainty, and concern over a Bernanke replacement seem to have been put to rest. The Obama administration announced that Ben Bernanke will keep his position as Fed Chair. The news seemed to have stabilized the markets somewhat.

Both Treasuries and equities have fallen victim to the summer doldrums. Excessively weak volume will likely plague the remainder of this week and encompass all of the next two. Don't forget about the Labor Day holiday on the 7th in which U.S. markets will be closed.

We believe that equities could be getting a bit toppy in the near term, if this is true a 2 to 4 day correction in equities could feed another Treasury rally. Assuming we are right, we could see the 30-year retest the recent highs near 121 and the note back to the mid-118's. Likewise, the 5-year note could be headed toward the mid-116's. Support could be found near 118, 116'20 and 115'10 respectively.

* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.







*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.

 

[carleygarner]

The Bond Bulletin By Carley Garner

August 27th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th.


Treasuries digest


A better than expected GDP report and a late session rally in equities prevented Treasuries from reacting positively to a strong 7-year note auction. Additionally, a sharp and sudden decline in the greenback kept bonds and notes under pressure during afternoon trading.

The U.S. government sold $28 billion in 7-year notes at a rate of just over 3%. The bid to cover was a healthy 2.74 and foreign buyers seemed to be present given the 621.2% indirect bidder rate. The market seems to be torn between the massive supply and nearly as impressive demand for the securities.

Friday on a light volume week such as this is a tough call. Our upside projection in the 30-year was 121, with potential for 121'24, coming in and today's high of 121'07 was in the vicinity. This leaves us on the fence in regards to tomorrow...However, we would prefer to see a continuation of the rally to just under 122 as we think that this could be a good opportunity for a short-term bearish trade.

The note rally has been a bit lethargic, have been calling for the mid-118's again but still think that 119 is in the cards at some point. However, it is difficult to determine whether they will continue higher from here or pull back to just under 117 before resuming the up-trend. After all, today's high wasn't terribly off of our expectation and that may have been all the market has in it for now.

Don't forget that the CME Group is officially changing the minimum tick size in the 30-year futures contract to 1/32 from 0.5/32 beginning Sunday night. The change will not impact any other Treasury futures, nor will it change the way that bond options are quoted. If you recall, this is the original format of the contract and the change is likely being welcomed by open outcry traders. The exchange is asking that all GTC orders be canceled by customers, otherwise they will be automatically canned. GTC orders can then be re-established following the Sunday night open.

* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

The Bond Bulletin By Carley Garner

September 2nd, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th. We will explore whether speculation in stock index futures is more efficient than ETF's.


Treasuries on the move after ADP estimates


Traders are beginning to position themselves ahead of Friday's employment report and if the ADP's estimates have any merit the news could be slightly bullish. The question of whether or not gains will be sustainable is yet to be answered.

While ADP's predictions got off to a rocky start, they are getting progressively more accurate. This time around they are guessing that the U.S. economy has lost nearly 300,000 jobs despite analyst expectations for closer to 250,000. Today's productivity and factory orders reports were also supportive for bonds and notes.

Tomorrow we will hear about the "other" ISM index on services and initial claims; however, all eyes are on Friday. Given the ADP prediction, the market seems to have priced in a dismal number so it may take a considerably worse reading to force the rally higher. If it happens, I will likely be looking for subsequent weakness going into the weekend.

It is important to note that the U.S. dollar is playing a part in Treasury trade. The September dollar index has been stuck in a rut for weeks and if things don't change this could hinder the upward momentum in Treasuries.

Our upside target and potential near-term reversal point in the 30-year bond lies at 121'17 in the December contract (the market was fast approaching this as I was typing). As Friday approaches, I am favoring a strategy of becoming bearish post-employment report should we see a sharp rally. If you are trading the note, you may want to be similarly bearish near 118'08 in the December contract.


* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

The Bond Bulletin By Carley Garner

September 8th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th. We will explore whether speculation in stock index futures is more efficient than ETF's.


Long-bond uch'd


Treasury traders must have stayed on holiday and I can't say that I blame them. Today was a slow news day and provided little incentive to come back to work following the last three-day weekend of the summer.

On the other hand, the Fed was back at it today. They purchased $4.95 billion of the $14.486 billion in bonds offered by dealers. However, the market was pre-occupied with another record-breaking week for auctions.

Optimism over the auctions kept the short end of the yield curve above water but the long end suffered in early morning trade as investors mull over the boatload of supply coming down the pipeline. The Treasury auctioned $38 billion in 3-year notes today along with $29 billion in both the 3 and 6-month bills...and that is only the beginning. the Treasury will sell re-opened issues of 10 and 30 year fixed income securities over the next few days.

We have pivotal support in the 30-year in the mid-118's and so far it appears to be holding. Our chart-work suggests that that the long bond is gunning for 122 resistance but we wouldn't be surprised to see 124ish at some point in the next week or two. However, should we get there we would be highly bearish. In the meantime, we will wait for what we feel is a good opportunity to be involved. If we are wrong, and the market breaks and holds below 118'10 the next stopping point will be 116.

10-year notes never reached our upside target of 119, but they may be on their way. We see first resistance near 118'15 and will likely turn bearish at such levels.

Our idea to be a seller in the 5-year note near 116 turned out to be a good one, but we think that the market could be headed for 116'08ish from here.

* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

The Bond Bulletin By Carley Garner

September 10th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Stocks and bonds rally....together?


A weaker dollar and rallying equities weren't enough to put a cap on bond and note buying. A better than expected auction of 30 year bonds along with an overall bullish bias on the day resulted in a two handle rally. The pace of the reversal likely caught many bears on the wrong side of trade and the squeeze had little mercy.

It is a little unusual to see stocks and bonds moving in tandem but that is exactly what we are seeing. Impressive demand for the $12 billion in reopened 30 year bond issues gave Treasury bulls confidence in near-term demand for the securities. Likewise, it gave stock traders some hope in the Fed's ability to finance its massive balance sheet. The auction went off at 4.238% but the futures market brought the yield well under 4.20% by the day's end.

The greenback continues to struggle but Treasury traders aren't paying attention. The U.S. dollar index is trading at its lowest level in a year but it hasn't really weighed on interest rate products as it should. This either signals underlying strength or is simply the result of holiday trade and a fickle market.

Even more surprising was the interest rate market's snub of Treasury Secretary Geithner's pledge of a recovery and the resulting bank repayment of rescue funds. However, the market focused on the negative comments and overlooked the positive (this is in contrast to the equity market interpretation of the same information).

We feel as though bonds and notes have some room to move on the upside but today's move was a bit irrational and the seasonal top is looming. Look for resistance in the December 30-year near 122 with the possibility of a move to 124. Notes seem to be on their way to 118'5 but could see the closer to 121 should things get "out of hand". We like being bearish this market at noted levels. Stay tuned for details.

* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

The Bond Bulletin By Carley Garner

September 14th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Treasury rally on pause


Bonds and notes took a much needed breather on Monday. It is easy to forget that this rally is 5-weeks old but at this stage some consolidation is necessary. However, the selling was tame and the volume light; this makes me feel as though this correction will eventually become another buying opportunity. Something tells me that the bulls aren't giving up so easily.

We often note seasonals in this newsletter and have pointed out the reversal that is often seen in late September to early October. If Friday's spike high was also the trend reversal then the seasonal top came early. Perhaps this is the case, but I doubt it. There is still a considerable amount of pessimism surrounding the economic recovery, the health of the equity rally and, at least for now, Treasury demand remains strong.

Supplies are large, but the market knows this. The next piece of supply info for the market to chew on will be the Treasuries auction announcement on Thursday. Next week, the government will auction notes in the two to five year space. The previous issuance of such securities took place in August and the market absorbed $109 billion worth of the notes without much of a hitch.

Some of today's selling may have been a delayed reaction to weakness in the greenback. As weak as the U.S. dollar has been, I believe that a majority of the selling has already occurred. A possible reversal in the currency markets could support the Treasury rally.

On Friday we recommended that our clients sell bond calls into the rally, most sold the November 128 calls for 18 ticks. As it turns out, things have gone relatively well with this trade thus far. However, we would like to take advantage of the dip and will be interested in looking to buy them back shortly. We have recommended that they place GTC orders to buy them back at 5 or better, but we might look to adjust the price accordingly.

In the meantime, it seems as though the 30-year could trade as low as 119'09 before finding support and the 10-year note could see 117ish. At such levels we will be relatively neutral with a bullish bias. We still think that our 122 and 119 initial targets in bonds and notes respectively are a real possibility. Don't forget about our secondary targets of 124 and 121.

* 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.

September 11- Our clients were recommended to sell the November 128 calls for 18 or better, we are now trying to buy them back for 5 or better to lock in a quick profit of about $200 per contract before commissions and fees.

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.







*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.

 

[justtradin]

September 8th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th. We will explore whether speculation in stock index futures is more efficient than ETF's.


Long-bond uch'd


Treasury traders must have stayed on holiday and I can't say that I blame them. Today was a slow news day and provided little incentive to come back to work following the last three-day weekend of the summer.

On the other hand, the Fed was back at it today. They purchased $4.95 billion of the $14.486 billion in bonds offered by dealers. However, the market was pre-occupied with another record-breaking week for auctions.

Optimism over the auctions kept the short end of the yield curve above water but the long end suffered in early morning trade as investors mull over the boatload of supply coming down the pipeline. The Treasury auctioned $38 billion in 3-year notes today along with $29 billion in both the 3 and 6-month bills...and that is only the beginning. the Treasury will sell re-opened issues of 10 and 30 year fixed income securities over the next few days.

We have pivotal support in the 30-year in the mid-118's and so far it appears to be holding. Our chart-work suggests that that the long bond is gunning for 122 resistance but we wouldn't be surprised to see 124ish at some point in the next week or two. However, should we get there we would be highly bearish. In the meantime, we will wait for what we feel is a good opportunity to be involved. If we are wrong, and the market breaks and holds below 118'10 the next stopping point will be 116.

10-year notes never reached our upside target of 119, but they may be on their way. We see first resistance near 118'15 and will likely turn bearish at such levels.

Our idea to be a seller in the 5-year note near 116 turned out to be a good one, but we think that the market could be headed for 116'08ish from here.

* 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.

Flat

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar Futures Trading Recommendations
**There is unlimited risk in trading futures.

June 29 - Our clients were recommended to sell September Eurodollar futures while buying a 9937.5 call as insurance. The calls were getting filled near 7 ticks, and the futures near 9933. This makes the total risk on the trade at expiration $287.50 before commissions and fees.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

Something does not feel right for sure. I have found that keying off the short end alerts me to future prices... which signals deflation. MS market seems to have other ideas. I feel like saying what am I missing in my analysis ?

 

[carleygarner]

The Bond Report by Carley Garner

September 17th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Bonds may be pricing in stock correction


I will keep this short and sweet as we are preparing for today's webinar with the New York Institute of Finance (I hope to see you there).

The bond market seems to be preparing for a correction in equities, but whether or not it will materialize is still unknown. An unprecedented amount of sidelined cash making its way to the markets has enabled one of the largest and swiftest bull moves in stock market history. However, judging by the refusal of bonds and notes to retreat there seems to be a disagreement between stock and Treasury traders in regards to the economic recovery that has yet to be resolved.

Historical stats suggest that stocks do well in early September but fall short later in the month and bond traders haven't forgotten. From a technical standpoint, we came into the day virtually neutral bonds and notes but today's strength seems to point toward another rally. However, it will take equity weakness to keep the momentum going. We still haven't given up on the possibility of a rally to 122 in the long bond and 119 in the notes and if we are right about a stock market correction by early next week, Treasuries could hit our upside targets.

Sorry so brief!

* 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.

September 11- Our clients were recommended to sell the November 128 calls for 18 or better, we are now trying to buy them back for 5 or better to lock in a quick profit of about $200 per contract before commissions and fees.

September 15- Our clients were recommended to change their orders to 6 and were getting filled.

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar 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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

The Stock Index Report by Carley Garner

September 18th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Countertrend Friday but Monday may be more telling


Trading volume was nearly non-existent. It almost felt as if the markets were closed for a holiday...but they weren't. I can't say that I blame traders for taking the day off, there was very little guidance during the session. In the absence of economic data, the Fed's purchase of $4.047 billion in Agency debt seemed interesting.

The greenback showed some signs of life, but the gains were minor relative to recent losses and weren't enough to impact the surrounding financial and commodity markets. The dollar gains appeared to be position squaring ahead of the weekend as opposed to actual long interest but this could change if we see some follow through on Monday. Naturally, a stronger dollar should keep Treasuries in favor.

We have been noting the 119'10 pivot in the long bond, and today's early low of 119'12 and subsequent grind higher suggests that the overall sentiment is slightly bullish to neutral. Traders seem to be reluctant to be overly Treasuries before getting a better feel for equities, specifically whether or not they will correct going into next week. We happen to feel as though despite the never-ending bull run in stocks, a pull-back is near. Assuming that we are right about the near-term direction of stocks, we could see bonds trading closer to 122 by early next week. If we are wrong about stocks, bonds may retreat to 117'24. Similarly, our upside target in notes lies at 118'15 and maybe as high as 119 should stocks falter.

Sorry so short, not much to talk about...Have a great weekend!


* 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.

September 11- Our clients were recommended to sell the November 128 calls for 18 or better, we are now trying to buy them back for 5 or better to lock in a quick profit of about $200 per contract before commissions and fees.

September 15- Our clients were recommended to change their orders to 6 and were getting filled.

Treasury Bond and Note Futures Trading Recommendations
**There is unlimited risk in trading futures.

Flat

Eurodollar 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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

September 29th, 2009

Visit our websites to register for our next free webinar..."Back to the Basics: Getting Started in Futures"


Treasuries waffle ahead of data


A surprise drop in consumer confidence reversed early morning weakness in Treasuries but the bulls struggled to keep momentum. While the recent trend has been higher, bonds and notes face significant resistance.

According to the Conference Board, their confidence index fell to 53.1 in September after posting 54.5 in August. Analysts were expecting an increase to 57. Consumer confidence levels are near the worst levels since the early 1990's. The negative news from the Conference Board overshadowed a better than anticipated Case-Shiller Housing index. According to the index, July marked the 6th consecutive increase in home prices.

Event risk remains elevated throughout the week, so it seems reasonable to expect an increased amount of volatility and fickle trade. We tend to believe that the Treasury market will be finding a relatively meaningful high in the coming week or weeks. The seasonal tendency in this market is for a downturn in early October that lasts approximately three weeks.

Thus far our primary resistance areas of 121'27 in the long bond and the mid 118's in the note, have held. While we prefer the downside, we still acknowledge that there is risk of a spike to 123ish in the 30-year bond and 120 in the note.

Our clients were recommended to sell the December 129 calls for about 20 ticks, but it just wasn't meant to be. The high of the day was 19 and some even tried to adjust the price a bit lower but weren't able to get a fill. We will be working the same order tomorrow but it may be necessary to adjust strike price and premium.

Of course, it is possible to get much more aggressive with this. One idea would be to sell a much closer strike price and another would be to use the proceeds of a short call to purchase a long put.

* 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.

Flat

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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

October 2nd, 2009


Like what you see? Pick up a copy of Carley's book "Commodity Options" at any major bookstore or online outlet!


Key reversal?


It has been an exciting week for Treasury traders and I think that I speak for all when I say that the weekend couldn't come soon enough. Bond and note bears suffered from buy stop running and the subsequent short squeeze on Thursday and in early trade on Friday. However, the momentum quickly subsided as it seems as though the last of the bears were out and the last of the bulls were in. When this happens, the market simply runs out of buyers and retreats. Similar, but opposite, price action was experience by the major stock indices.

The story of the day was the government's latest read on the employment picture. The September unemployment rate came in at 9.8% and the non-farm payrolls came in at a decrease of 263,000 jobs. Analysts were looking for a number under 200,000 so the miss was a catalyst for Treasuries to rally and stocks to decline. In brighter news, factory orders fell less than analyst estimates.

It is difficult to find anything positive in the employment report, but you have to account for the fact that much of the news was already known. After all, ADP suggested that this would be the case...although, their track record is questionable they managed to get this one right.

While it was a bit uncomfortable this morning, we still like the prospects of our short bond call recommendation. In fact, those with available margin and nerves of steel were able to add to their position at much better prices. We were getting fills back on the 128's for about 35 and near 23 for the 129's.

Yesterday we mentioned that the note seemed to be looking for 120, and today's high of 119'29 is close enough for me. From here we can't help but be bearish. Should stocks stabilize, we should see the note drop to just under 118 and the bond could see the mid-120's.

Check out this video made by our friends at DT Trading. They are our go-to guys for open outcry execution in CME/CBOT products and have a great feel for the markets. They will soon be providing an intraday commentary service to subscribers. I'll keep you posted!

YouTube - Mr Topstep Friday


* 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.

October 1 - Our clients were recommended to sell the December Bond 128 calls for 25 or better. (Sorry, there was a typo on the original...it was the 128's not the 129's).

October 2 - Those with margin and guts were able to add on to their short call position at better prices. Fills on the 128's came in at 35 and 23 for the 129's.

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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

October 8th, 2009

"Your book (Commodity Options) just paid for itself 358 times today...I'd call that a good investment any day!!! I'm buying 2 next time"~Jonas Miller. Pick up a copy of "Commodity Options" at any major bookstore or online outlet!



The highs could be in



Anticipation over this afternoon's 30 year bond auction kept yields under pressure (and Treasuries elevated) for much of the trading session. However, the rug was pulled from underneath the market in post-auction trade.

The Treasury issued $12 billion in 30 year bonds at a rate of 4.0009% with a 2.37 bid to cover and an indirect take of 34.5%. It was an average, at best, auction that didn't quite meet the market's expectations. Accordingly, following the news the long bond was finally able to retreat to rekindle the inverse relationship between stocks and bonds.

The dollar continues to get crushed but Treasury traders seem to be in denial. Or perhaps, the interest rate markets have forgotten the "rules" when it comes to inter-market relationships.

Don't forget about the looming seasonal peak in Treasuries. Bonds and notes tend to suffer for a period of two to three weeks from (about) now through late October. From there, traders may want to consider putting their bull caps back on.

In yesterday's newsletter, we mentioned a possible squeeze ahead of the auction and while we did see some upward action it was relatively subdued. We still favor the short side of this market and are patiently looking for the mid-120's in the 30-year bond and 118ish in the notes. That said, the notes have held a bit more technical integrity and must break below 118'25 to lure some follow through selling.

If you are following our short call recommendation, things are looking good for now. We will be interested in offsetting these in the coming days with what looks to be a healthy profit...although; we all know that things can turn on a dime.

* 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.

October 1 - Our clients were recommended to sell the December Bond 128 calls for 25 or better. (Sorry, there was a typo on the original...it was the 128's not the 129's).

October 2 - Those with margin and guts were able to add on to their short call position at better prices. Fills on the 128's came in at 35 and 23 for the 129's.

• October 6 - Those trading multiple lots were advised to peel one off of the table at a profit. The 128 fills were coming in at 19 and the 129's at 12.

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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined





*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.

 

[carleygarner]

October 9th, 2009

"Your book (Commodity Options) just paid for itself 358 times today...I'd call that a good investment any day!!! I'm buying 2 next time"~Jonas Miller. Pick up a copy of "Commodity Options" at any major bookstore or online outlet!


Bonds beaten down


The long end of the yield curve led Treasuries dramatically lower on the day on light volume ahead of the holiday. Just when many were looking for the 10-year note to kiss 3%, we ended up getting closer to 3.5%. We have been bears over the last week or so but I have to admit that the accelerated selling in the 30-year exceeded my expectations. The yield on the long bond jumped from about 4% to 4.25% in a matter of hours.

The day's weakness wasn't necessarily a surprise but it was an odd delayed reaction to this week's fundamental events. When you take a step back and look at the big picture, Treasuries should have suffered earlier in the week at the hands of stronger equities and a weaker dollar...but they didn't.

Keeping with Friday's theme, it seems as though the bonds may have a bit of catching up to do and could make their way down to the mid-118's before finding an intermediate-term low. However, a technical bounce seems likely given the size and speed of the drop as well as the fact that notes have, thus far, held our support area of 118.

Our clients were recommended to exit any short bond calls to lock in a profit on the trade and are now safely on the sidelines. Fills on the 128's were coming in from 10 to 8 ticks. Assuming a sell price of 25 and a buyback of 9 the trade was profitable by $250 per contract before commissions and fees. Of course, there are ways to be much more aggressive in playing this market such as option spreads, futures, or a combination of the above. If you are interested in working with us to put together a strategy that fits your personality, let us know. We would love to hear from you.

We came into the day looking for the mid-120's in the 30 year and the market fell right through it. On the other hand, we had been looking for 118'ish in the notes and support held nicely. Going into next week (and the Columbus Day holiday) we are on the fence. My best guess is that we could see a bit of a bounce them possibly resume the down move. However...I wouldn't take this ramble too seriously. We will get a better idea of what might be to come on Tuesday.



* 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.

October 1 - Our clients were recommended to sell the December Bond 128 calls for 25 or better. (Sorry, there was a typo on the original...it was the 128's not the 129's).

October 2 - Those with margin and guts were able to add on to their short call position at better prices. Fills on the 128's came in at 35 and 23 for the 129's.

• October 6 - Those trading multiple lots were advised to peel one off of the table at a profit. The 128 fills were coming in at 19 and the 129's at 12.
• October 9 - Clients were advised to liquidate their remaining short calls. Fills ranged from 10 to 8 ticks.


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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

October 16th, 2009

"Your book (Commodity Options) just paid for itself 358 times today...I'd call that a good investment any day!!! I'm buying 2 next time"~Jonas Miller. (*Past performance isn't indicative of future results).Pick up a copy of "Commodity Options" at any major bookstore or online outlet!


Mixed news, oversold bounce


Treasuries were slightly bid following a worse than expected University of Michigan consumer sentiment reading but hints of inflation kept the rally in check. Also capping gains, the net long-term capital inflow of investment dollars into government backed securities was a bit on the light side.

The Net foreign purchases of long-term securities were $28.6 billion; analysts were looking for $30 billion. The amount of foreign buying interest in the face of a weak dollar has surprised many but it suggests that overseas investors are seeing currency valuations as a bargain rather than a risk. I tend to agree that with the greenback at multi-month lows, it seems as though the path of least resistance will eventually be higher. I can't argue that dollar fundamentals aren't weak, but I also feel as though the fundamentals backing the other major currencies are equally as troublesome. If this assumption is true, it will be supportive for the long bond and notes.

Treasuries have fallen rather sharply in recent weeks and were due for a technical bounce. Whether or not the day's moderate gains will turn into something more will be highly dependent on the behavior or equities in a post option expiration world. It is hard to determine if stocks were being buoyed by expiration or if it was actually holding back the rally. Our gut tells us that we will see lower stocks and higher bonds at some point next week.

Here is a similar prediction made by some of our friends on the floor with DT Trading YouTube - "No stops go untouched on the S&P". DT is a specialist that we use the one CME floor to execute open outcry positions for our clients and they have always had a knack for the markets as well as the ability to provide efficient fills.

We are still a bit mixed when it comes to our sentiment in regards to the Treasury complex. The 30-year has come close to reaching our downside projections but the note has not. However, we are going to continue to assume that the long bond is leading the short end of the curve and will lean higher. That said, the follow through buying this morning was disappointing so any bullish position should be played close to the chest.

We are showing support in the 30-year bond near 118'15 and again at 118'03, our first resistance will be near 120'13. Note traders can look for support near 117'19 then again just under 117. Resistance lies at 118'11 then 119'02.

In yesterday's newsletter we boldly predicted a reversal in all of the financial markets (Treasuries, stocks and currencies). Today wasn't the day, and tomorrow might not be either but we feel like such a scenario could happen by as early as next week.

* 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.

October 15 - Yesterday afternoon, our clients were advised to sell puts against a possible Thursday plunge. We recommended to sell the December T-bond 112 and 113 puts for 20 and 26 ticks respectively, or about $312 and $406 before commissions and fees.

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

Stock Index and Bond Futures Trading
- Commodity Broker Redefined



*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.

 

[carleygarner]

October 26th, 2009

Carley will be speaking at a Trader's Library event in Las Vegas during the Trader's Expo, check it out: http://www.traderslibrary.com/conferences/tlforum2009vegas/index.html


Supply, supply...supply


Treasury bulls took it on the chin again today despite spiraling equities. Another record Treasury auction has buyers in remission. The government will be putting $116 billion in securities ranging from 2 to 5 year notes throughout the week. Today saw the re-open of $7 billion in 5-year TIPS, which were met with surprisingly strong demand and a lower than expected yield. Treasury traders seemed to view the high demand for TIPS as confirmation of inflation concerns resulting from monetary and fiscal policy.

The U.S. dollar index recovered considerably on the day, sending the Euro sharply lower. Going into last week, we were calling for a reversal in all of the financial markets. Stocks were the first to roll over, currencies seem to be in the midst of an attempt to reverse the trend and Treasuries should be the last to go. We can't rule out one more probing low in bonds and notes but feel as though the recent dip is an opportune time to be a bull.


Although the flight to quality bid was nowhere to be found in today's session, it could reemerge should equities continue their slide. The S&P, along with the other major indices, appear to be at a crossroads but in the case of broken near-by support the market could suffer another bout of aggressive selling.

Because of this, and seasonal tendencies in favor of Treasury trade, we prefer to play the long side of this market for now. Coming into the day, we were looking for just above 118 in the 30-year bond; it now seems as though the mid-117's are possible. Similarly, 117 is supportive in the notes but a move to the mid-116's is probably on the horizon. However, we are leaning higher from here.


* 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.

October 15 - Yesterday afternoon, our clients were advised to sell puts against a possible Thursday plunge. We recommended to sell the December T-bond 112 and 113 puts for 20 and 26 ticks respectively, or about $312 and $406 before commissions and fees.

October 20 - Our clients were recommended to exit the 112 puts near 6 ticks and the 113 puts near 8. Fills on the 113 puts were coming in at 9, we recommended to make the 6 tick buyback on the 112's GTC. Those that still have a short 113 put open, we recommend a GTC order to buy it back at 9 or 10.

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.CarleyGarnerTrading.com
www.DeCarleyTrading.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.

 

[traceyjc]

Hi

I was wondering if I could ask you a bond question.
Month end exstensions in europe are said to be high this month. I tihnk the squawk said 0.09yrs.
Is there anyway to translate that into equivalent amount of futures (say 5000 bunds or something like that)?

Thank you kindly

John
Futures Trader

 

[carleygarner]

November 4th, 2009

Carley will be speaking at a Trader's Library event in Las Vegas during the Trader's Expo, check it out: http://www.traderslibrary.com/conferences/tlforum2009vegas/index.html


Pre-Fed volatility non-existent


It was a long day for bond and note traders. The futures markets traded painfully sideways in anticipation of the FOMC interest rate decision. At times it was difficult to determine whether my quote board was frozen with the long bond at 118'22 or if it was just that quiet.

Prior to the Fed, the market was faced with bearish news. The Treasury announced that it will be auctioning another new record issuance in notes and bonds next week. Specifically, they will be selling $40 billion in 3-year notes, $25 billion in 10-year notes and $16 billion in 30-year bonds. The auctions will take place on Monday, Tuesday and Thursday respectively. Also keeping bond bulls under wraps is a resilient equity market. On the other hand, the ISM index was a little worse than expected but was still in growth territory.

As expected, the Fed chose to leave the overnight target rate at near 0 and they also noted that they intend to keep rates "exceptionally low for an extended period". The news was relatively expected and seemed to give bond traders the green light to price in the recent (bearish) economic news.

We have mentioning an overall neutral bias in the near-term but seasonals are still pointing higher. Accordingly, today's dip might eventually create an attractive buying opportunity. Our original support level in the 30-year bond was 117'15 or so; therefore, we will wait to see if such prices or lower print tomorrow. We will be shopping for bullish opportunities tomorrow, but given the employment report looming on Friday we might choose to risk missing a trade as opposed to jumping in front of what could be a freight train.

Look for the notes to decline to the 117 area; at these price we think that the 10-year begins to look attractive.


* 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.

October 15 - Yesterday afternoon, our clients were advised to sell puts against a possible Thursday plunge. We recommended to sell the December T-bond 112 and 113 puts for 20 and 26 ticks respectively, or about $312 and $406 before commissions and fees.

October 20 - Our clients were recommended to exit the 112 puts near 6 ticks and the 113 puts near 8. Fills on the 113 puts were coming in at 9, we recommended to make the 6 tick buyback on the 112's GTC. Those that still have a short 113 put open, we recommend a GTC order to buy it back at 9 or 10.

• These orders have all been filled, you should be out of this trade.

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.CarleyGarnerTrading.com
www.DeCarleyTrading.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.

 

[forexpeters]

brilliant thread Carley Garner

 

[carleygarner]

November 12th, 2009

See me on Facebook!

Rocky auction, but Treasuries survive

The yield on the long bond spiked higher to levels not seen since the middle of August on lighter than expected demand in the 30-year auction. The news came after a better than expected reading on weekly jobless claims and seemed to be a great excuse for trade to trigger the long line of lingering sell stops lingering beneath 118 in the 30-year bond.

The Treasury auctioned $16 billion in 30-year bonds at a rate of 4.469% and a disappointing bid to cover of 2.26. The indirect bidder participation rate was 44%. Overall, the week's auctions went well but the hitch in demand for the long bond was temporarily unnerving for the market.

Initial jobless claims are approaching the coveted 500,000 mark; this weeks' new claims were 502,000. Continuing claims are also on their way down, the latest reading was 5631k.

Now that the market has gotten the massive supply out of the way and the uncertainty of the 30-year auction, the next move could be higher. We had been looking for a "flush" of the longs that would bring the long bond "closer to 117" and provide a bullish opportunity that we could feel good about and we got it. Unfortunately, the move happened quickly making it difficult for many to have gotten off their trades before the massive rebound. Unfortunately, it takes more than a good idea to make money in the markets. I hope that some of you were able to capitalize!

We can't help but feel like the next move will be higher in the 30-year bond futures. Now that many of the weak longs were stopped out, they might try to chase the market higher. Look for resistance in the mid-119's but we think that 120'21 is in the cards.

Notes, on the other hand, have been outperforming bonds and might not have as much room to move on the upside. It seems like the mid-119's will be first resistance but 120 could be possible.





* 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.

Flat

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.CarleyGarnerTrading.com
www.DeCarleyTrading.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.

 

[carleygarner]

November 23rd, 2009


Look for our market outlook quoted in the December issue of Futures Magazine!



Risk trade leaves Treasuries out of favor



Bonds and notes suffered at the hands of equity gains as investors are seep to be pouring money into "risky" assets such as commodities and equities. However, as has been the case, the selling across interest rate products lacked enthusiasm.

With the Thanksgiving Day holiday upon us, it is likely that the markets will see very little trading volume throughout the remainder of the week. Despite an action packed economic calendar and another round of sizable auctions, traders seem to have already called it quits. Some liquidity will come back for the first few weeks of December but the real volume typically doesn't show up until well into January.

The absence of trading volume, and traders, is important in that many proprietary desks leave their second string traders at the wheel. The combination of illiquidity and "back-up" traders can mean large and unexplainable market moves. If you recall, last year a few sessions before Thanksgiving the 30-year bond futures rallied approximately 10 handles over the course of three trading sessions. Seven of those handles took place in a single trading day.

With this in mind, less trading is "more" during this time of year and entry prices are even more critical than what would otherwise be.

Failure for the bears to control trade this morning on what seemed like overwhelmingly bearish conditions could lure another round of short selling. Also, those that have yet to offset positions ahead of the holiday will be looking to do so and based on the most recent COT data the large traders were net short on Friday. This could mean a rally to 122 in the 30-year bond and just over 120 in the 10-year 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.

November 15 - Sell the January Bond 125 calls for 20 ticks or better.

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.CarleyGarnerTrading.com
www.DeCarleyTrading.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.