The Bond Bulletin - Flight to quality bid in Treasuries
C. Garner I DeCarley Trading - 05 February 2010
Although the non-farm payrolls data was reported to be in line with expectations, it was an action packed end to the trading week. The day's economic news leaned lower in Treasuries but a volatile stock session and sovereign debt risk issues prompted some flight to quality buying.
According to the government, the U.S. economy lost 20,000 private sector jobs last month and the unemployment rate fell to 9.7%. Like this pro football player says...what is everyone crying about? http://www.cnbc.com/id/15840232/?video=1405435640&play=1
However, most believe that the drop in the unemployment rate can be attributed to a shrinking job pool as opposed to actual improvement. As we all know, the stats don't account for those that have given up on finding a job or are "underemployed". Accordingly, the pain being felt throughout the economy is worse than what is shown on paper.
Next week's calendar will be much less active and this leaves traders to focus on the upcoming auctions and testimony from Fed Chair Ben Bernanke. Don't forget that $40 billion in 3-year notes, $25 billion in 10-year notes and $16 billion in 30-year bonds will be auctioned...and this is a considerable amount of supply for the market to absorb.
In yesterday's newsletter, we were looking for the bonds to rally to 120 and the 10-year notes to see 118'25 and today we got it (almost). The note seems to be getting near-term toppy but the bond never reached our objective and may have a little room to run on the upside before a temporary reversal can occur.
Our weekly charts are suggesting that the note could reach a bit over 121 before reaching a seasonal peak in March. Similarly, the T-bonds could see 123 again.
* 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.
* 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
cgarner@DeCarleyTrading.com
DeCarleyTrading.com
CarleyGarnerTrading.com
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.
About the Author:
Carley Garner - Senior Market Analyst and Broker, Stocks & Commodities Magazine Columnist and Author - Carley Garner is a Magna Cum Laude graduate of the University of Nevada Las Vegas, from which she earned dual bachelor’s degrees in both Finance and Accounting. Carley jumped into the options and futures industry with both feet in early 2004 and has become one of the most recognized names in the business. Throughout her fast paced career, Carley has been featured in the likes of Stocks and Commodities, Futures, Active Trader, Option Trader, Your Trading Edge, and Pitnews Magazine. Carley is often interviewed by news services such as Reuters and Dow Jones Newswire, and has been quoted by the Investor’s Business Daily and the Wall Street Journal. She has also been known to participate in Radio interviews. Carley's book titled “Commodity Options” was published by FT Press, a division of Prentice Hall, and is now available through all major book outlets. She has recently completed her second book, which is slated to be available in early 2010. Her e-newsletters The Stock Index Report and the Bond Bulletin are widely distributed and have garnered a loyal following; she is also proactive in providing free trading education, for details visit http://www.carleygarnertrading.com/. To register for a complimentary subscription to her daily newsletters, the Stock Index Report and the Bond Bulletin, visit 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. |
