US TNote Future – Dec 2009

Nicole Elliott from Mizuho Corporate Bank at 11/10/09

Comment: The rising Ichimoku ‘cloud’ has pushed this contract slightly higher but progress is alarmingly slow. A daily close above 119.00, and ten-year benchmark yields through the pivotal level at 3.28% should speed things up. We expect this to give way this month so that this futures contract rallies to a new contract high prior to delivery. Bullish pressure should increase if prices now hold above 118.00.

Strategy: Strategy remains unchanged: buy at 118.20/118.10; stop below 116.16. Add to longs on a daily close above 119.00 for 119.26 short term, then 121.00.