Today's unemployment report came in under expectations which reversed yesterday's bearish tone in the 30-year futures.
The Bureau of Labor Statistics states that the "total nonfarm payroll employment rose by 96,000 in August, and the unemployment rate edged down to 8.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, in professional and technical services, and in health care."
Technically, futures broke through second resistance at 150'10 basis December and equaled but did not break yesterday's high at 150'28. The index of the most recently auctioned 30-year Treasury bond (TYX) hit a high today of 2.861 and is now trading at just below the mid-point area on a day bar at 2.782. The 2.86 YTM area poses significant resistance against retesting the 3.00% level that was nearly tested in mid August.
FutureSource Daily Dec. ‘12 30 Year T-Bond Chart
One of my associates stated that shorting the bond market was like trying to drown a beach ball in the pool. It's tough to trade what you believe fundamentally is correct on top of a consistent lack of breakouts and one gap after another on the charts. Considering the volatility in the futures markets an option with the strategy of near and intermediate term range bound markets combined with long term directional plays with a bearish bias is worth a look. See RJO Futures RJO MRT and Hightower research for ideas or call me directly anytime.
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Jeff Gilfillan
Senior Commodities Broker
Jeff began his career in 1992 as a runner at Geldermann Inc. After several years clerking in the corn futures and 30-year bond open-outcry pits, he made a transition "upstairs" as a broker at First American Discount Corp. After working five years with an upstart brokerage in Chicago, he joined MF Global in 2006. In November 2011, he moved to RJO Futures. He graduated in 1992 from Loras College, Dubuque, IA, with a B.S. in finance..... Read More
