Stock and Commodity Quote Ticker
| Employment report pressures bonds and notes |
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| Written by Administrator |
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*All rights reserved. Reproduction or distribution of this newsletter without prior consent is strictly prohibited. April 5th, 2010 Join us on April 8th for a free webinar with PFG on "Demystifying Treasury Futures": http://www.pfgbest.com/webinar/eventSummary.asp?skey=332215675Employment report pressures bonds and notesTreasury trade suffered at the hands of a respectable Good Friday employment report. According to the government, the economy gained 162,000 jobs last month to post the best reading about three years. Unfortunately, the markets weren't given an ample opportunity to react to the news on Friday. Unlike last week, this week offers little economic guidance and this could leave the upcoming auctions in the driver's seat for Treasuries. Tomorrow, the Treasury will auction $40 billion in 3-year notes and on Wednesday they will issue $21 billion in reopened 10-years, then on Thursday it will be $13 billion in 30-year bonds. The previous round of shaky demand, leave the market vulnerable to a bit of panic if things don't go off well, but we doubt that it will last. After all, the market's expectations for this weeks' auctions are modest at best so we believe the surprise risk is to the upside. We aren't sure why the tremendous rally in crude hasn't attracted more attention, but light sweet crude oil traded on the NYMEX is now trading at prices that haven't been seen since the fall of 2008. At some point, this could begin to crush the recovery and could put a floor under bonds and notes. The 10-year note reached the 4% yield level for the first time since June of last year, some are calling for a run to the mid 4% area. The futures look week 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 cgarner@DeCarleyTrading.com 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. |
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