March Treasury Bonds are down 6/32 this morning at 115:22 as I write. The included chart shows that March T-Bonds are still involved in a fairly steep decline in price ever since the neckline of the double top was broken a week ago in the 117:00 area. That 117:00 area is now resistance on any rallies. Traders should be looking to sell short more March Bonds on rallies back towards the 117:00 area. The directional movement indicators are bearish that the ADX line continues to rise. The measured initial downside target for March Bonds is 111:00 as mentioned in previous letters. On this expected light trading day prior to New Years, I recommend holding our current positions and enjoy the holiday.
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 50 days.
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.