Bond rally nearing an end?
- Thread starter gharghur2
- Start date
Hi Surdo,
Yes read it ... Say anything new?
Bernake is a bozo.
Il Principe
Guest
Well, blew right through that. ZN is right at resistance on the rolling front month weekly chart, so huff & puff and that will fall, too. The sad thing is, you can't charge the market interest for loaning it your gains from the last week.
Something interesting I noticed today, and maybe some cash guys/OTC/convexity gurus can help with this, is that Wells Fargo sold absolutely every option they own. All told at the days end they had sold 85,000 March 110 calls, 15,000 March 111 calls, 65,000 March 106 puts, and 20,000 Dec 107 puts. These were all part of the position they began rolling long into just last week during the convexity scare. So if the 10yr is going to 4% like some banks seem to be calling for, why is Wells Fargo not remaining long these calls and puts to hedge a further convexity bid? The rally today baffled me (was started by everyone's buddy Brumfield, was bid 3,000 lots on the screen the whole way from 15 to 19 without anyone touching it) in that the size of the trade on the initial move higher was not that large. I would have thought some size players would have loved to hit those bids, but ultimately waited until above 20, and now we are trading back to 17 overnight. Again, hopefully someone can explain why Wells Fargo dumped their massive position (other than that volatility is going to get hammered going forward and they think range-bound for awhile).
Other than the 2YR rates turned lower, I don't know.
I wouldn't bet a short right now. Yesterday the ADP report came with Wages well below expectations and so, tomorrow, the market may go much higher. I was expecting ZN to test the breakout on 107^20, but now i think it's just going to resume the uptrend right into the target i am expecting in the 109^24, with yelds around 4.4%.
Well, let see what market is going to do.
Bye.
Well, let see what market is going to do.
Bye.
Maybe this drop has something to do with what is in our chairman's mind? Two key points in his Q&A section yesterday:
1. Long term economics outlook is not a bad one, short term problem such as high energy price could be solved;
2. "Historical Low rate" may help turning housing market around.
Maybe nothing new, but it just doesn't smell like rate cut in any way. This is my impression, or IMHO. Pressure is on, especially in 30yr long end.
1. Long term economics outlook is not a bad one, short term problem such as high energy price could be solved;
2. "Historical Low rate" may help turning housing market around.
Maybe nothing new, but it just doesn't smell like rate cut in any way. This is my impression, or IMHO. Pressure is on, especially in 30yr long end.
Lol, funny, i told i wouldn't bet a short right here 
, but at least in an intraday basis i should have done.
Maybe it was the strong employment data. But after the ADP report released yesterday, i have a feeling that tomorrow the payrolls are going to be very well below expectations and the market could resume the uptrend.
Bye.
, but at least in an intraday basis i should have done. Maybe it was the strong employment data. But after the ADP report released yesterday, i have a feeling that tomorrow the payrolls are going to be very well below expectations and the market could resume the uptrend.
Bye.