After getting smoked initially, I wound up getting long finally late in the session and squeeked out a nice day in ZB! I am not sure if these have many more legs, so I went home flat. It sure feels like Spooz blew their load at 1400, and wanna go lower...so maybe these rally another 1/2 point ??? el surdo
Surdo Deffinantly agree with you about spooz....it took a massive dump at 1400 and looks like its given up the ghost for now. I bought 2 10yrs at 115.16 yesterday. We bottomed on some pretty heavy volume and we are making some new highs on top of that bottom so I think we are good for a decent rally....especially if spooz starts to break. My question to some of you more experienced treasury traders is what happens next fundamentally? We obviously can't cut rates much more right? I mean there isn't much more to cut. So my thought would be that if rates can't be possibly cut much more guys should start liquidating treasuries right? Because the next rational thought would be if we can't cut than we will hike (or stay flat but that can't happen forever). Thoughts YT
back to 120+ i covered all my shorts in on the way down here (but I didnt pick the bottom) bought 121 sept calls yesterday
I thought the spooz were consolidating to pop higher since the last 3-4 times we hit over 1390 they killed it and did not do it this time. Since we could not get under 1370 for a week or so I thought there would be a bear trap pop up to 1420 but that did not happen. What has happened is the paper seems to have found a bottom for now in the long end of the curve and see this area as relative value. That being said I am not going to make any real interpretations of overall flow till 7:30am on friday after NFP then I think we will see where ZN, ZB and ES will go for the next big move. For now it seems spooz are cooked and get long the long end. YT-the market is still more concerned with credit and not so much about inflation or any fundamentals. That will change as the financials stabilize and the grain bubble bursts.
not that is a trading range! thank you spooz for helping my shorts! short 117.195 after the high was put in cover 9 way too early!
Appears as though treasuries found a little resistance today. I expect weakness tomorrow also. However I will continue to hold on to my longs in the 10yr until we have broken below that 5 day low that we bottomed on (I expect that to hold well). As far as options go......it seems like paper is mixed in the 10yr pit. Anybody thats buying seems to be liking the sep 120 calls. Guys are also selling sep 111/117 strangles but to be honest its so mixed I really can't define a trend as to what paper is doing in the 10yr pit. Just have to wait and see I guess.