Need Reason For Bond Rally Last Sept

Discussion in 'Trading' started by Pa(b)st Prime, Sep 6, 2007.

  1. As a very underwater Treasury short I have technical reasons to think today's highs are a major pivot. If penetrated the market may rally fast like last Sept.,19th-25th. Does anyone know what happened? Stocks were in a quiet chop that weak. IOW's no flight to quality. I already know what the impetus could be tomorrow for a similar explosion.
  2. dhpar


    yep i know brother - lost loads of money. the catalyst was phily fed (I think below zero)...
  3. I'm very much in the same boat. Have been losing money continuously on my ZB and ZN puts for the past month or so.

    Tommorow is a key day. If that jobs report is very scant to negative, ZB to 115, ZN to 111 here we come !!! Otherwise, this may be a turning point for a last hurrah of 4.5% yields.

    [err.. remember those headlines two months ago about China dumping treasuries and Bill Gross getting bearish bonds??? That was the perfect buy signal on the ZB/ZN]
  4. Major short coveering that day. I remember it well.
  5. I think the number needs to print off the chart for any significant movement before the 18th.
  6. dhpar


    however there is very different settings this time.

    to break on short end it means to rally through schatz which is not easy. why would anybody buy us tsy if the only perspective is fed cutting rates and dollar going down the drain? better to shift it to europe or else.
    without short end it is not going to be easy for long end to rally - especially when the only perspective is fed cutting rates and loosening focus on inflation (yeah - commodities are giving some clues Benie).

    so my bet is sell off tomorrow - likely paralel move but could be steepening due to equity mkts getting f&cked up (I think that will not happen though).

    I go for unemployment = 4.6%. payrolls are tough - likely sub 100k.

  7. dhpar


    agree - negative payroll number would likely make it.
  8. dhpar


    yep - tell me :(
  9. Nice post. Yea, I have a million thoughts. The surprise number is a huge jump in jobs. Fed Funds already took out a good portion of that poss .50 today. 25 plus is now the yardstick. Does a bad payroll, a poss reversal day in commodities (crude and Wheat retreated, what if Gold breaks to-morrow) then all of a sudden the market's back trying on .50 for size.

    On the other hand if you get an increase in wages ect. with commodities still in bull mode the remnants of those cuts comes into question. (Dec Funds are pricing in a 90% chance of SEVENTY FIVE BP's By EOY).

    I say it's the 1970's.

  10. dhpar


    i agree - it is risky to be short here. i got burned in august so i play it very cautiously. bit by bit my monies may come back - or they may not.
    #10     Sep 6, 2007