Treasury Bond Daily Commentary for 4.28.09

The 30 Year T-Bond futures are edging higher Monday, exercising their negative correlation with U.S. equities.  However, the 30 Year futures haven’t made any noteworthy fundamental moves to the upside and the downtrend remains in clear control.  If the present pullback in the S&P futures were to turn into a large selloff we wouldn’t be surprised to see a corresponding rally in the 30 Year futures. 

Although, as we’ve witnessed since the announcement of quantitative easing, every move to the upside has failed to materialize into anything noteworthy.  The 30 Year’s downside preferential reflects the huge supply of treasuries needed to fund America’s economic stimulus and recovery measures. 

Hence, the use of quantitative easing is not solving the problem, merely tempering volatility.  On a positive note, the 30 Year futures have managed to stay above March lows, preventing a catastrophic selloff.  

Fundamentally, our 125.19 resistance turns support while we maintain our supports of 124.78, 124.36, 124.03, and 123.69.  To the topside, we hold our resistances of 125.53, 125.81, 126.20, and 126.67 with fresh top-end of 127.25.  The 30 Year futures are presently trading at 125 17.5.

Treasury Bond Daily Commentary for 4.28.09

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