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Oct 13 2017

Time for a Continuation bet in the 30year

Bonds have rallied smartly since our Long bet on Monday. Now we are seeing very constructive price action as Bonds grind higher.

Whether traders are starting to position for a potential Fed pass at the Dec meeting or whether this is simply a reaction to the recent downdraft matters not to us.

What does matter is that the Downtrend line has clearly been broken & price is forming a nice consolidation pattern - Once there is a confirmed move through 153, we should move quickly to the 155 area which is the Fib 50% retrace level.

Lets buy Dec ZB futures @ 153
Sell the Nov 24 155 Strike Call for approx 49/64 - The delta on this option is approx .30

Close both legs on a hourly close below 152 or once the 155 Target is reached. Your Risking $700 to make $2k for a acceptable 3-1 R/R Profile.

For more detail on the intermediate Bull case for bonds, please see our prior blog post from Oct 9.

Good Trading,

3ptCapital

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