Futures Outlook: 05/13/13
I have been asking people to pay attention and be ready for the shift when it comes to T-Notes since Fall of last year. I ask you now, to once more place your attention here.
As the Fed has been accused of failure and yields have been pushed to unheard of lows, everyone needs to be aware of the potential for next steps to either harm your portfolio inherently due to exposure you already have or allow you to be in driver’s seat for what’s coming. If you have any inclination that interest rates will be raised over the next number of years you should be paying attention to these charts and opportunities.
I am looking for a failure long term in the T-Notes market and options can be a great way to take advantage of this type of move should it develop well for us.
Per our Weekly chart, The 131 territory is a level that I would like to see broken down cleanly. Keep in mind that the play that I am talking about here is not for a day to day scenario, but rather a longer term play. If you decide to play these short term, you will want to pay attention to the Weekly chart and the Monthly chart, but your Daily chart would become paramount.
Finally, in the Monthly chart, I have crudely highlighted the ascent in prices on the 10 Year T-Note. I want you to look at the type of appreciation that existed, the steepness of the trendline and just how long this has been going upwards.
It has been in a virtual climb for the last 6-7 years. In this type of overbought condition corrections may very well be on their way. It is one of those moments in history where you will look back and smile if you recognize and employ strategies to take advantage of the next moves or kick yourself if you watch the opportunity go by you.
Our strategy for T-Notes is one that is fixed risk and starts off slowly as we don’t have that crystal ball to tell us exactly when things will happen. What we do know is that we want to be involved when they do.
In the world that lives through Commodities and Futures daily, these markets are much more than what you need to survive. They are what you can utilize to thrive.