May 8th, 2008
**Read my monthly column "Futures for You" in Stocks and Commodities!!
The Treasury market enjoyed a healthy bid as higher bonds prices overseas were contagious. It was a relatively slow news day, leaving the 30 year auction in the spotlight. Once again, trading volume was "ify" and some insiders noted that the day's rally seemed to be on spread unwinding.
The 30 year auction yielded mixed results. There was relatively low foreign interest but still some decent demand for 30 year bonds issued at 4.599%. Bond traders allowed Treasury prices to trickle lower ahead of the auction, but post auction picked up a bid.
In yesterday's report I mentioned that near-term resistance would be found at 116'30, today's high of 117'04.5 seemed to have fulfilled the market's need to digest the recent drop. While I wouldn't put money on it, my bet is for another decline to 114'18 at which point I would be shopping around for short puts. 114'18 is significant in that it is heavy support on both the daily and the weekly charts. If I am wrong, we may see another retest of 117'04.5 and potentially even 119'01 if there is a fundamental catalyst such as rallying crude oil.
The one and only report scheduled in tomorrow's session is the Trade Balance due out at 8:30 Eastern. There is a good chance that many traders will call it an early weekend by calling it a day shortly after the economic release.
Option Recommendations
**There is unlimited risk in naked option selling.
Flat
Futures Recommendations
**There is unlimited risk in trading futures.
Flat
Carley Garner
Alaron Research Team
800.935.6492
cgarner@alaron.com
www.CommodityTradingSchool.com
There is substantial risk of loss in trading futures and options.
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