Euro−Bund future – Dec 2009

Nicole Elliott from Mizuho Corporate Bank at 11/02/09

Comment: Benchmark yields are again testing pivotal levels: Schatz 1.25%, ten-year 3.25% and 30-year 4.00%. It is just a matter of time before these drop to this year’s lows, breaking out of the relatively tight band established early this summer. The combination of Fibonacci and channel support, the rising Ichimoku ‘cloud’ and candles supporting the Lagging Span, stemmed the futures contract’s decline last week as hoped. Friday’s close at 121.90, the highest weekly one since early October, might add a little bullish momentum, turning moving averages to bullish later this month. Contract high, here we come!

Strategy: Buy at 122.00, adding to 121.35; stop well below 121.00. Add to longs on a daily close above 122.00 and again above 123.00 for 124.00/124.60 and probably a lot more before year-end.