#PotentialTrades – Update #4

Potential price action that I’m interested in:  Short, 30-year US Treasury Futures…  and [update], long E-Mini futures (S&P 500). 

The yield on the 30-year US Treasuries has been testing the 3.20-3.25% level multiple times in the last couple of years.  It hasn’t been above 3.30% sine 2014.  Inflation expectations would be the primary reason for a breakout.  We have seen reactions to the upside for yield (downside for the futures) for each of the last two job reports.  I’m not crazy about Friday’s close on the 30-year futures, but when I step back and look at the long-term chart, the trend is down and there are no fundamental reasons I can see in the next few months for the trend to reverse.  Risk management will be critical. It may take a couple of attempts to catch the next move.  I’m already short 1 contract at 142-29. 

The leverage on this contract is pretty big.  A stop outside the Average Trading Range (ATR) can hurt with an account as small as this one. I’m watching it carefully for intraday support-resistance level to potentially tighten my stops sooner.

30-year Treasury Futures, June ’18 exp.- Daily Chart

Screen Shot 2018-03-11 at 5.05.44 PM

30-year Yield – Weekly Chart

Screen Shot 2018-03-11 at 5.08.27 PM.png


UPDATE 3/13/2018:

Entered on 3/9.  Exited on 3/12 for a loss of $725.

As mentioned, it may take a few trials to catch the next wave, assuming that it will take place.  For now, the chart is turning the other way, with yields dropping and futures prices rising.   Better luck next time.

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