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
Thursday, August 13, 2015
Treasuries and Eurodollar Futures - like a 'shooting star'
Eurodollar futures volume on Wednesday was the
second largest since mid-June as traders tried to discern the implications of
the China yuan revaluation.Price action
swung from bullish to bearish within the session, ending the session with
slight gains, but erasing as much as 10 bps or more from the session high in
some distant contracts.Open interest
soared 152K, indicating that some confidence has been restored.Treasuries too found good volume in yesterday’s
trade and rising open interest in 5’s and 10’s (33K and 21K respectively).
The candlestick formation from yesterday’s price
action in most of the Eurodollar and Treasury futures is called a ‘shooting
star’ and like the meteoric action one sees in the night sky, it suggests Eurodollars
and Bonds are to fall back toward Earth.
That price action comes not only on the heels of
shocking China news, but in front of today’s retail sales data, a data series
that has been disappointingly soft.Bloomberg survey expectation is for a gain of 0.5% for the ‘Control
Group’ from a loss of -0.1% in June.A
strong report will likely find recent ED and TSY longs moving to the