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
1-866-790-TRADE
Local : 702-947-0701
http://www.carleygarnertrading.com/
http://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.
