A faint light is often all that is cast upon truly outstanding positioning strategies before they ready. Fundamental analysis, awareness of monetary policy developments, positioning conditions and other trend characteristics followed allow candlestick charting analysis to shine needed illumination. Martin B. McGuire
Wednesday, July 22, 2015
Bonds Still Have Friends
In early trade today, Treasuries show short end weakness
and the long end higher with a stronger dollar and lower commodities prices.Light volume attended trade yesterday and
open interest declined in Fed Funds, Eurodollars and Ultras (-4K, -28K, -5K)
while increasing in FV, TY and US (+18K, +27k, +6k).
Home prices and existing home sales data come today, having
shown steady gains in the last months as an outsized contributor to economic
Yesterday I correctly anticipated the initially weaker
price action, calling for a decline in Bonds below 151 (Treasury Long End Under Pressure).Following that decline in early trade, the
contract extended gains from the prior session, marking a 5th
consecutive new session high and settled higher by 18/32nds, thus discounting
the bearish implications of the noted bearish Harami.
Although respectful of the advancing price action in the long
end, we are not willing to recommend long positions at this juncture and would
instead continue to expect prices to fail.A settlement at or below 151-30 in USU5 would create a bearish engulfing
pattern in bonds and support selling activities.Otherwise, a settlement above the July 9th
bearish engulfing at 154-08 would indicate that the bullish contingency has
regained controlling influence.