March Treasury Bonds are up 3/32 at 116:01 this morning as I write.  By noon today most commodity markets will be closed including treasury bonds.  Trading volume should be very light.  The included chart shows that March Treasury Bonds broke the double bottom support a few days ago.  The double top at 123:00 and the neckline of the double top at 117:00, project a downside target of 111:00.  Based on the speed at which it took the previous rally to run from 111:00 to 123:00, it should take at least three months for March T-Bonds to fall to 111:00.  The caveat to that idea is the fact that more times than not, when it takes a long time for a rally to rally and peak out, the following selloff is usually quick as most longs will want out of the exit fast.  So, let’s say that the target of 111:00, if hit, should happen within three months from now.  Hold current positions.

 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 57 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.