The Interest Rate futures reversed course today and finished sharply lower giving back most of the gains made on Tuesday. This does not bode well for me as I was a fairly aggressive buyer in the 10's and 30's but, considering the poor finish in the Stock Index futures today, I have to say that I'm willing to give this trade more time before I start to bail.
I traded the 10's and 30's pretty aggressively today and I'm under water in a big way. I'll need some help from stocks before the week ends or I'll have to reassess my position. I started buying the 10's first then I scaled in 4 trades in the 30's before buying more 10's. Here are the trades that I made today.
BOT 10 DEC 10 yr. Notes at 108-08
BOT 10 DEC 10 yr. Notes at 108-02 (Market closed at 107-27)
BOT 5 DEC 30 yr. Bonds at 111-20
BOT 5 DEC 30 yr. Bonds at 111-16
BOT 5 DEC 30 yr. Bonds at 111-12
BOT 5 DEC 30 yr. Bonds at 111-08 (Market closed at 110-27)
These trades leave me under water by $11,875.00 in the 30's and $6,875.00 in the 10's. This is a fairly large position for me and it could end up costing me some serious money but I'm confident that interest rates are ready to fall and that bond prices will rise. I'll exit my position in the in the 30's on a close below 110-00 and 107-16 in the 10's.
Dale F. Doelling
Chief Market Technician
Trends In Commodities
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