wmeubank@ocp.kcmo.com
IRA EPSTEIN & COMPANY
223 West Jackson, 7th Floor, Chicago, Illinois
(December 15, 1997) FINANCIAL INSTRUMENTS: TREASURY BONDS–This week is the last full week of bond futures trading before the end of the year. This means that many traders are going to be squaring their positions and diverting their attention to egg nog and Christmas presents.
What does this mean for the market?
In my experience, the bond futures pits get very quiet and sometimes downright boring at this time of year as many traders take their vacations. Aside from the FOMC meeting on December 16 (When the Federal Reserve decides whether or not to change interest rates), there should not be a lot going on. The general opinion is that The Fed will not raise interest rates due to concern over the Asian equity markets.
An abbreviated summary of this week's economic reports and forecasts:
Monday 8:15am: November Industrial Production
Median forecast: 0.6% Prior: 0.5% Actual: 0.8%
Tuesday 8:15am: November Housing Starts
Median forecast: 1.49M Prior: 1.53M
Tuesday 7:30am: Consumer Price Index
Median forecast: 0.2% Prior: 0.2%
Thursday 7:30am: October Trade Balance
Median forecast: -$10.6B Prior: -$11.1B
RECOMMENDATIONS–Since I do not anticipate the market making any big moves for the next couple weeks I recommend putting on a February 117/122 short strangle in the 30-year bond. The idea being to take advantage of time decay.
Kyle Graham
|
|
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com