March Treasury Bonds are down 1/32 at 118:29 this morning as I write.  The included chart shows that march T-Bonds have a well defined trading range established between the double top at 123:00 and the double bottom in the 117:00 area.  Everything in between is noise.  This current bounce in the bonds has brought prices right up to the area of the 40 and 90 day exponential moving averages.  A 50% correction inside the range would put bond prices up into the 120:00 area which is also where the 200 day moving average is located.  So there are several resistance levels inside of this range.  If the March Bonds begin to roll over in the next week or so, then I will be looking to add more to our current bearish positions.  The directional movement indicators are bearish and the ADX line is meandering sideways.

 Followers should be:

Long one March Bond (114:00 strike) put option from 2 12/64. (Cost basis of 28/64, or $437.50, if you include the buy back of the two short 110:00 put options on December 8th).

Long one March Bond (108:00 strike) put option from 52/64.  (Cost basis of 2/64, or $31.25, if you include the buy back of the two short 105:00 put options on December 8th).

Long one March Bond (117:00 strike) put option from 128/64.

Short one March Bond (113:00 strike) put option from 51/64.

March options expire in 63 days.

 David Hall

 The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

 This newsletter is not intended for dissemination to the public without prior approval from David Hall.