Commitment of Traders Buy Signal in 30yr Bond Futures

Commercial bond buying reinforces equity sell off.

August 23, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.

Commercial Traders Buying Bonds

This morning we have a buy signal in the 30yr Bond futures. Commercial traders were major buyers coming off of the March lows and finally started to shed their positions as the market climbed above 148. Their selling patter became quite clear as the market stalled between May and June before finally selling off in July and August. Commercial traders are now actively re-purchasing contracts.
This also ties in with the sell signal we posted yesterday in the Dow futures. We expect bond futures to rally as money finds its way into safe havens in anticipation of an equity sell off. Finally, the Federal Reserve Board minutes seem to be pointing towards QE3. This will further depress yields and lead to greater price gains in the futures.
We will buy bonds and place a protective stop below the swing low at 145^08.

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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

Double Top in 30yr Treasury Bond Futures

Commitment of Traders Report Shows Bearish Commercials

Commercial traders shed half their position in last six weeks.

July 18, 2012

This trade setup is merely a random sample of the day’s trades generated by COT Signals. To track our work their and receive all of our nightly trading recommendations, click here.




Commercial traders have been placing heavier bets on a rise in yield for long dated Treasuries. This is most obvious in the 30yr Treasury Bond futures. Commercial traders have cut their position by more than half in the last six weeks. This move also fits in with the action in the interest rate sector we discussed in mid June in, “Fear and Inflation.”
Briefly, we discussed the very light buying of Treasury futures during May’s equity sell off. Their buying was substantially less than would be expected during a flight to safety rally. Finally, we pointed out a piece by Crestmont Research on interest rate volatility and using their analysis came up with a price envelope for December Bond futures of 154^20 on the high side and 140^06 on the low side. Extrapolating this to the September contract we are currently trading and we get 153^17 high to 138^30 low. We will be selling 30yr Treasury Bond futures and placing our protective stop above the swing high at 152^10.

 

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ANDREW WALDOCK
866-990-0777
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.