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Two Ways To Play: Demand for Treasuries Continues to Soar

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Strengthen your portfolio in good times and bad.

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Demand for Treasuries Continues to Soar

The US sold a record $81 billion in bonds this week -- a new record, but investors sucked it all up, alleviating concerns that the huge supply would overwhelm demand.

According to the Wall Street Journal, a record $40 billion in three-year notes was met with the strongest demand since 1990. The 30-year auction didn't' perform as well but was still close to recent averages.

Nonetheless, foreign investors continue to show up from Asia as well as central banks. One fixed income executive also noted significant interest from large domestic funds and banks.

From the Bull Pen: Bulls can look to energy for upside plays, specifically Exxon-Mobil (XOM) pulling back to $71 support. But be alert as the stock could be putting in an inverted cup-and-handle formation so a sell stop could be set below that level.

From the Bear Cave: Yesterday's 30-year treasury auction didn't go very well. If you think a big problem is looming ahead, reserving a portion of your portfolio for the Ultrashort 20+ treasury ETF (TBT) may not be such a bad idea. In the short term, a sell stop can be set below 46.

A Quick Check around the World

Asian trading closed with the Nikkei -0.35%, India 0.92%, Hang Seng 0.70%, Shanghai 0.46%, and Taiwan -0.07%.

Across the pond, we see the FTSE 0.26%, CAC -0.15%, DAX 0.22%

As of 8:10 AM EST, S&P Futures are trading +1.25 to 1088.50. Nasdaq futures are up +2.75 to 1776.50.

A Look at Commodities

Over in commodities, crude oil is +0.14 to 77.08 while gold is +0.200 to 1106.80 this morning. Silver is -0.30 to 1723.5 and copper +0.800 to 295.55.

The dollar Index is -0.2000 to 75.4950.

On the Radar

Economics

08:30 Export Prices ex-ag
08:30 Import Prices ex-oil
08:30 Trade Balance $-31.9B cons.
09:55 Michigan Sentiment-Prel 71.8 cons

Careful! It's Friday the 13th! I'm just kidding. Have a great weekend!


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No positions in stocks mentioned.

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