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.