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| BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe. |
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| Bonds Online |
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| 5/10/2013Market Performance |
| Municipal Bonds |
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S&P National Bond Index
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3.00% |
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S&P California Bond Index
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2.96% |
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S&P New York Bond Index
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3.13% |
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S&P National 0-5 Year Municipal Bond Index
|
0.70% |
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| S&P/BGCantor US Treasury Bond |
400.09 |
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| More |
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| Income Equities: |
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| Preferred Stocks |
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S&P U.S. Preferred Stock Index
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848.03 |
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S&P U.S. Preferred Stock Index (CAD)
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636.26 |
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S&P U.S. Preferred Stock Index (TR)
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1,701.05 |
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S&P U.S. Preferred Stock Index (TR) (CAD)
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1,276.26 |
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| REITs |
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S&P REIT Index
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174.07 |
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S&P REIT Index (TR)
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425.30 |
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| MLPs |
|---|
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S&P MLP Index
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2,469.58 |
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S&P MLP Index (TR)
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5,428.50 |
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See Data
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Investors Flock To U.S. Treasuries As Skepticism Remains On Greek Aid Package |
DAILY MARKET - April 5, 2010 - by OptionsXpress
Fundamentals
Bond bulls are starting to flex their muscles again, as investors begin to flee “risky” investments and move into the supposed “safety” of U.S. Treasuries, as concerns over the European Union/IMF bailout of Greece continues to weigh on markets worldwide. Although an aid package for Greece was announced earlier this week, there are still doubts as to whether this will be enough to prevent Greece from eventually defaulting on its debt, or whether other EU nations such as Portugal, Spain or Italy will also need aid to deal with their own debt issues. In addition, the German parliament has not yet voted on the Greek aid package, which is very unpopular with the average German voter, and any signs that Germany will balk on the agreement is adding to traders’ nervousness. The biggest beneficiaries from the uncertainty surrounding the EMU have been the U.S. Dollar and U.S. Treasuries, which continue to be the favorite investment options in times of economic confusion. The fresh round of buying has sent 30-year bond yields to 4-month lows, as well as sparked renewed buying in shorter maturities, as analysts are now starting to pare back their expectation of a Federal Reserve interest rate increase later this year. Although the rally in bond prices appears to be gaining momentum, bullish traders may wish to be a bit cautious about adding to positions, as the U.S. Treasury is scheduled to auction $80 billion worth of treasuries next week, including an estimated $16 billion worth of 30-year bonds. With this huge supply coming to market, we may see some hedge selling ahead of the auction that could cap any further rally attempts in the near term, unless the European debt crisis becomes even more uncertain that nervous investor buying trumps commercial selling.
Trading Ideas
Given the “flight to quality” buying and looming Treasury auction, June Bond futures could possibly see increased volatility during the next couple of weeks. Traders looking for a potentially large move in bond futures may wish to investigate the purchase of a strangle in 30-year bond futures options. An example of this trade would be buying the June bond 122 calls and buying the June bond 118 puts. With June bonds trading at 119-28 as of this writing, this strangle could be purchased for 50/64, or $781.25 per spread, not including commissions. The premium paid would be the maximum risk on the trade, with the trade breaking even at option expiration in May if June bonds are trading above 122-25 or below 117-07.
Technicals
Looking at the daily continuation chart for 30-year bond futures, we notice the just over 5-point rally since the beginning of April, when June bonds made 11-month lows of 114-06. Prices are now well above both the widely watched 20 and 100-day moving averages, and the 20-day MA has crossed above the 100-day MA , which is considered a bullish technical signal. The 14-day RSI is quite strong, with a current reading of 66.29. Tuesday’s price surge took the June contract above recent resistance at 119-18 and sets up a potential test of the 121-18 area. Support for June bonds is seen at the 20-day moving average currently near the 117-04 area.
Mike Zarembski, Senior Commodity Analyst
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Income Security Recommendation January 2013 Issue.
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