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September 30th, 2008 Pre-order my book, "Commodity Options" today! Visit www.DeCarleyTrading.com for details. Flight to quality bid implodes. Talks of another Congressional attempt to salvage the domestic economy reversed much of the gains forged in yesterday's buying frenzy. A dead cat bounce in equities and bond unfriendly economic data also helped to move the Treasury futures complex lower.
The Chicago PMI was reported to be at 56.7, much more promising than the expected 54. Keep in mind that a reading above 50 suggests expansion. Consumer confidence was reported to be at 59.8. Naturally, both of these numbers lag reality but they do suggest that there are still some scattered areas of strength in the economy and the way that consumers are viewing it.
There are a lot of uncertainties in the market place in terms of both fundamental and technical factors. The mixed signals that I am seeing are my cue to prompt traders to move to the sidelines and be patient. The direction of the market no doubtedly relies on Congress and equities; as we have all come to discover, they aren't always predictable.
From a technical standpoint, the long bond seems to be looking lower; however I am not confident enough in my analysis to recommend that anybody put their money on it. I see support in the December 30 year futures near 116 once again and resistance at 119'05. This leaves the market will a significant amount of wiggle room and in my opinion too risky to pick a direction in. With that said, sub 116 levels begin to be attractive from a bullish perspective.
The 10 year note could slide to 113'30 before finding support, but resistance should be found at 116'11. If you are trading the five year note futures, the December contract becomes a buy near 111.
Treasury Option Trading Recommendations **There is unlimited risk in naked option selling.
Flat Treasury Futures Trading Recommendations **There is unlimited risk in trading futures.
Flat
Carley Garner Senior Analyst / Commodity Broker DeCarley Trading cgarner@DeCarleyTrading.com 1-866-790-TRADE Local : 702-947-0701 www.DeCarleyTrading.com 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. |
