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To: pallmer who wrote (3849)	12/8/2002 10:09:48 PM
From: pallmer	Read Replies (1) \| Respond to of 29597

-- Debt futures speculators dump bond contracts-CFTC -- CHICAGO, Dec 6 (Reuters) - Speculators in Chicago Board of Trade Treasury bond futures sold the contract sharply during the trading period from Nov. 27 to Dec. 3, according to data released on Friday. The Commodity Futures Trading Commission's Commitments of Traders report on speculative positioning is used by many analysts as a reverse indicator of future market direction. Speculators generally comprise trend followers seeking to pick a precise top or bottom in the market. Extreme net long speculative positions, for example, often presage a decline in the futures contract, especially if that position conflicts with those held by the more influential players. Bond futures speculators extended a net short position to 12,782 contracts from 1,206 contracts in the previous reporting period. Analysts noted that the shift in speculators positioning was dramatic, but they also acknowledged some extenuating circumstances. "There was a major adjustment of positions," said John Person, head financial analyst at Infinity Brokerage Services. "But I think we have a reason for that adjustment. It was rollover time and the holidays." He said some of the unwinding of long position may have been related to "rollover" or spread trading, which occurs when futures traders sell December futures contracts for positions in equivalent March contracts. If a trader exited a long December bond position on Tuesday with plans to take a long March bond position, the new long position would not necessarily be reflected in the Commitments of Traders report. The CFTC collects data for the report on Tuesday. December debt futures expire on Dec. 19, but the March contract has already taken over as lead month. "They got out of longs and they added some shorts," Person said. "Right now we're starting to sense that the market is experiencing some extremely volatile swings. But I think this is fairly neutral." March bonds gained during the CFTC's reporting period from a close of 107-15/32 on Nov. 27 to a close of 107-30/32 on Dec. 3. The contract extended gains through Friday. Speculators in 10-year note futures extended a net long position to 57,387 contracts, its largest since August, to 50,403 contracts in the previous reporting period. The data may have been colored by the same rollover factors that affected the bond futures market, Person said. March 10-year note futures climbed from a close of 110-25/32 on Nov. 27 to a close of 110-29/32 on Dec. 3. It extended gains through Friday. ((Chicago Derivatives Desk (312)408-8750 chicago.derivatives.newsroom@reuters.com)) 30-YEAR BONDS 12/03/02 week 11/26/02 week Long 26,028 32,874 Short 38,810 34,080 Net -12,782 -1,206 10-YEAR NOTES 12/03/02 week 11/26/02 week Long 157,140 149,926 Short 99,753 99,523 Net 57,387 50,403 FIVE-YEAR NOTES 12/03/02 week 11/26/02 week Long 140,877 141,146 Short 69,165 60,394 Net 71,712 80,752 TWO-YEAR NOTES 12/03/02 week 11/26/02 week Long 7,914 8,771 Short 8,047 6,998 Net -133 1,773 (C) Reuters 2002. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world. nN06569211 06-Dec-2002 22:01:42 GMT Source RTRS - Reuters News