Markets do react to divergences. The shorter the term the less the reaction. I watch momentum indicators all the time in many markets. In example, there were negatvie divergences on the DOW coming into this morning: right now down 50 points. The timeline is only 15 minutes, so it will be short lived. The best trades, I have found, is when you have divergences in the 15 minute, 60 minute and daily charts. It's a great setup!
Absolutely and that's why many of us established a position before the FOMC statement but the bond market is reminding us this morning that it doesn't always work that way. My original plan was to wait until today's 10 Yr auction that I still expect to be successful but my technicals turned wildly bullish early morning yesterday and felt that the probability of a surprise component in the FOMC statement was too low to ignore the buy signals coming from my panoply of indicators. Boy, was I wrong about not getting any surprise out of the FOMC.
Something fishy up in the 2yr pit, Duestche Bank has paid 20.75 up to 21 on 5000, 2000 more holding on the 21 bid. Also hearing that the big order on the screen was Goldman yesterday and maybe real.
Thx Mcurto! Maybe its time for short term rates to turn down a bit. On the longer term front, I'm still liking Bonds here. Standing pat and watching the churning.
Duestche Bank 7000 total, and Carr has also bought 5000 on the day, I bet same guy as Goldman yesterday.
My bet is that the buying in the short-end is reflective of steepeners being put on. Found it very interesting that 10yr JGB have approached 2% - which might be a significant psychological level for banks/insurers to shift into yen denominated assets. Also, look at bunds selling off to new lows and you are seeing a reflation (if itâs a word) trend in long-term bond markets that may be secular rather than cyclical. Curious to know if Japanese put buying has been noticeably absent in 30s? Mcurto?
Very noticeably absent in the whole CBOT complex (the Japs put buying that is). They have done nothing over the last month or so.