You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Bond rally nearing an end?
- Thread starter gharghur2
- Start date
We got some very nice spike lows right after the statement was released and small short seemed to be the play going in, and if one was quick enough to hit some bids at least until we traded to 106-25, which was a level where we traded forever after making those spike lows for the year at 106-12.5. After that spike, the Japanese began buying more ten-year puts, May 106 puts 10,000 times, and we started to stabilize very nicely. Every time they buy those puts they always expire worthless, its purely a hedge against the levels where they come in to buy cash or futures. The May 107 straddles sellers (essentially Goldman) are still aggressive and almost impossible to fade as it seems our journeys away from 107 always bring us back there by options expiration, can't tell me that is a coincidence. As for the 2yr, I still think it isn't a great buy yet, as no one has even thrown out the notion the Fed will go to 5.50%, once everyone begins that crazy talk its time to get out of short 2yrs, until then, short until further notice with 5yr supply ahead tomorrow.
They also rolled their May 109 puts in the 30yr options into the May 108 puts 5,000 times in the last minute right before the bell. Again though these are hedge levels, not saying we can't go through them, but we may not stay through them forever, at least never long enough for him to take profits on the hedge.
About growth, they said
- "Although recent economic data have been uneven, the expansion in economic activity appears solid."
January 31st, 2006. - "The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace."
March 28th, 2006.
Quote from mcurto:
... The May 107 straddles sellers (essentially Goldman) are still aggressive and almost impossible to fade as it seems our journeys away from 107 always bring us back there by options expiration, can't tell me that is a coincidence...
Doesn't Goldman have "two of the best ten traders" on the street. Or, so they were rated as being such.
Thanks appreciate your input.
Will be looking technically at the 10/30yr this evening.
Quote from steveosborne:
About growth, they saidSo, no change on that front either.
- "Although recent economic data have been uneven, the expansion in economic activity appears solid."
January 31st, 2006.- "The slowing of the growth of real GDP in the fourth quarter of 2005 seems largely to have reflected temporary or special factors. Economic growth has rebounded strongly in the current quarter but appears likely to moderate to a more sustainable pace."
March 28th, 2006.
Yup! Agree there.
So when is the Caldaro-Osborne connection going to tune in again? =)
Well, the problem is that today's drop killed the opportunity I was waiting for. I want to get short but I was expecting bonds to go up first, before going down for 4 to 6 weeks. So right now, there's no good selling or buying opportunity.
This has been chopped suey trading the entire month of March.
Steve, I missed selling the 30's @ 111 1/2 as well.
I had just gotten over my bruises from the week prior.
If the sharks start smelling 5 1/4 - 5 1/2 % Fed Funds, you will have plenty of opportunity to trade these on either side.
I think we have another leg down , but am not going to miss the ride back up when some insignificant econ. number moves these up a full handle for no reason, again!
Good luck.
Steve, I missed selling the 30's @ 111 1/2 as well.
I had just gotten over my bruises from the week prior.
If the sharks start smelling 5 1/4 - 5 1/2 % Fed Funds, you will have plenty of opportunity to trade these on either side.
I think we have another leg down , but am not going to miss the ride back up when some insignificant econ. number moves these up a full handle for no reason, again!
Good luck.
hey mcurto-
Is there any talk on the floor about the June bund getting close to a key level of 117.25. According to my continuation chart, a break would lead the market to levels not seen since 2004. Seems like this would be very bearish for treasuries since:
1. with bund you now only give up 100bp yield vs TY
2. usd/jpy outlook much more bearish than eur/jpy
Is there any talk on the floor about the June bund getting close to a key level of 117.25. According to my continuation chart, a break would lead the market to levels not seen since 2004. Seems like this would be very bearish for treasuries since:
1. with bund you now only give up 100bp yield vs TY
2. usd/jpy outlook much more bearish than eur/jpy
Quote from Surdo:
This has been chopped suey trading the entire month of March.
Steve, I missed selling the 30's @ 111 1/2 as well.
I had just gotten over my bruises from the week prior.
If the sharks start smelling 5 1/4 - 5 1/2 % Fed Funds, you will have plenty of opportunity to trade these on either side.
I think we have another leg down , but am not going to miss the ride back up when some insignificant econ. number moves these up a full handle for no reason, again!
Good luck.
We're in the fifth wave down that I was expecting earlier in the month. Don't know why it took so long to unfold. Was orginally looking for the low 109's on the 30yr. Staying with that!