carleygarner
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Treasury futures retreat...but slowly
Although bonds and notes have suffered in recent sessions, the selling has been relatively tame given action seen in the surrounding financial markets. The recovering Euro and stock market "should" have had a more profound impact on Treasuries. The lack of bearish sentiment leaves us scratching our heads.
The 10 year note traded above 3% for the first time in some time but according to Freddie Mac, 30-year fixed rate mortgages fell to another record low average of 4.57% from 4.58%. The 1-year adjustable dropped to 3.7% (hopefully nobody falls for this).
In economic news, initial claims for unemployment benefits fell to 454,000 to post a better than expected figure.
Helping to keep Treasuries afloat, demand for low yielding, but nearly guaranteed, Treasuries continues to be evident. Today's $12 billion auction of 10-year notes drew 1.295% with a bid to cover of 2.88.
Don't forget, that with the G-20 pledge to get government balance sheets under control there is less concern over supply (excessive Treasury auctions). The market seems to have taken this promise to heart, and that could also be part of the explanation for hovering prices.
We still favor the short side of the market, but have scaled back our conviction; if you are sitting on open shorts with a profit...scaling back, tightening stops, etc. is probably a good idea. In the meantime, the first "good" support lies at 125'09 in the long bond futures and near 121 in the 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 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.
June 29 - Clients were advised to sell the August 131 Bond calls for 26 or better
July 6 - Our clients were advised to close their short August Bond 131 call position near 10 or 11 (most fills were reported at 11). This locks in a profit of $234 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
*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.
Although bonds and notes have suffered in recent sessions, the selling has been relatively tame given action seen in the surrounding financial markets. The recovering Euro and stock market "should" have had a more profound impact on Treasuries. The lack of bearish sentiment leaves us scratching our heads.
The 10 year note traded above 3% for the first time in some time but according to Freddie Mac, 30-year fixed rate mortgages fell to another record low average of 4.57% from 4.58%. The 1-year adjustable dropped to 3.7% (hopefully nobody falls for this).
In economic news, initial claims for unemployment benefits fell to 454,000 to post a better than expected figure.
Helping to keep Treasuries afloat, demand for low yielding, but nearly guaranteed, Treasuries continues to be evident. Today's $12 billion auction of 10-year notes drew 1.295% with a bid to cover of 2.88.
Don't forget, that with the G-20 pledge to get government balance sheets under control there is less concern over supply (excessive Treasury auctions). The market seems to have taken this promise to heart, and that could also be part of the explanation for hovering prices.
We still favor the short side of the market, but have scaled back our conviction; if you are sitting on open shorts with a profit...scaling back, tightening stops, etc. is probably a good idea. In the meantime, the first "good" support lies at 125'09 in the long bond futures and near 121 in the 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 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.
June 29 - Clients were advised to sell the August 131 Bond calls for 26 or better
July 6 - Our clients were advised to close their short August Bond 131 call position near 10 or 11 (most fills were reported at 11). This locks in a profit of $234 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
*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.
