Bond rally nearing an end?
- Thread starter gharghur2
- Start date
let's not be paranoid about chinese diversification.
Likely the main reason is that Tsy curve is very rich with all possible bad information priced in - and there is a lot economic data this week.
Also Poole saying that ED futures get it usually wrong does not spur confidence in people who priced over 2 cuts in 2007 already....
On top of that the weak USD means more preassure on core CPI/PCE pushing even a remote possibility of cuts into the realm of scince fiction.
Some people just need to get it black on white - and even then they do not believe it until they lose money.....
P.S. Gross is idiot.
All dips will be met by dip buyers (hedge funds, real money accounts, Asians) until the data says otherwise. I definitely agree we are priced for bad news, but it is not worth selling into any downtick based on that alone, we need hard fact that things are better than the 500,000+ net long base in the 10yr futures believes. Liquidity is begining to fragment in futures as we roll all these 20,000+ lot positions into March, hence the exaggerated move both ways. We are still rangebound and most dealer accounts are still short 10yr volatility at the 108 strike. On the other hand, the mortgages are long 109 calls in Feb and March with very little put protection, last time they bought puts with their call hedge they called the move. We'll see if they are right this time with only calls on . . . .
The only way a market can function is when private investors are putting there own money at risk. Once governments get involved any ability to price risk is gone. Thats where we are in the bond market and its a sad sign.
I found Monday's activity to be quite interesting. Per my journal I only trade intraday, and my long term predictions could probably be used as a contrary indicator, however, I found something very interesting today with price behaviour between 0830 and 0900 CST.
I shorted from the open based on my approach detailed in my journal. Later, when prices failed to approach or break the 112 22 low, I took a look at the hourly chart and realized something. I saw the structure of the movement that was established roughly 30 days ago. The interesting thing was it didn't matter how I wanted to label or count this structure. If 112 22 wasn't violated then we were going up, and up dramatically from there. If it was violated then my observation would be incorrect on the up move, and I would simply maintain my short.
In any event, here is my long term prediction. Prior to visiting 112 22 again, we will hit 115 00 or 115 19.
Keep in mind that I won't trade the above. I only trade the bonds intraday.
I shorted from the open based on my approach detailed in my journal. Later, when prices failed to approach or break the 112 22 low, I took a look at the hourly chart and realized something. I saw the structure of the movement that was established roughly 30 days ago. The interesting thing was it didn't matter how I wanted to label or count this structure. If 112 22 wasn't violated then we were going up, and up dramatically from there. If it was violated then my observation would be incorrect on the up move, and I would simply maintain my short.
In any event, here is my long term prediction. Prior to visiting 112 22 again, we will hit 115 00 or 115 19.
Keep in mind that I won't trade the above. I only trade the bonds intraday.
Lance if you have sec. Do you believe that a gap seen Nov 6 could get filled as per your rules on gaps? Or is the gap too small to be considered a good candidate ?
Thank you.
Thank you.