March Treasury Bonds are up 4/32 at 116:07 this morning as I write.  Most markets today are very quiet as investors are more focused on the holiday’s now than the markets.  By 12:15 PM tomorrow afternoon, all US commodity markets will be closed until after Christmas which is on Friday.  Trading will most likely be very quiet today and tomorrow.

The included chart shows that March Treasury Bonds broke below the support level in the 117:00 area a couple days ago.  The downside target for this move initially should be 111:00.  The directional movement indicators are bearish and the ADX line is rising which all confirm the strength of this down move.  We are currently positioned well to take advantage of this potential down move.

 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 58 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.