Chinese Selling Pressures Bonds

The massive liquidation of Treasury’s by the Chinese government has pressured Bond futures into testing support levels. On August 31^st Bonds closed below the 100 DMA and today it so far has failed to hold onto any rallies. It is trading below the 100 and another close below this support level could lead to further price declines as we head to Friday’s Employment report. A good showing from Nonfarm payrolls could lead to more talk of a Fed rate hike at its next meeting during the week of September 15^th. This would keep pressure on bonds and could lead to a test of the June lows at 147 11/32. MACD has crossed over to the downside and is heading towards the zero line. I look to buy October 150 puts in the Treasury Bonds for $600 with the idea that continued selling of Treasury’s by the Chinese and a possible rate hike by the Fed could lead to a further price decline in the bonds.