Avg trade guess is about -60K w/5% unemployment rate. As a firm believer in the fact that the news follows the price action, I'm guessing the number prints positive and the unemployment rate retains its 4 handle. 2 year Treasuries got seriously hammered this week despite Bernanke's gloomy comments on Wednesday and a brutal unemployment claims number on Thursday morning. With absolutely no signs in the data that the economy has bottomed, the market essentially priced out any more Fed Funds rate cuts beyond another 25 bp at the next meeting. My personal opinion is that we're in the early innings of a a slowdown/recession. My trade - flat going into tomorrow. If the number prints positive, 2 years will get destoyed again ... at that point I'll be a large buyer. If the number prints negative, the 2 years will rally and I'll have missed the trade for now.
It will come in slightly worse than expected and the market will initially sell off but end higher. Buy the dip unless it is a catastrophic number like a month or so ago.
^^^ I hear you. However, I'm a big believer that in certain key months, "the market" knows the number ahead of time. Its the only way I can explain the destruction in Treasuries this week. I've seen it happen a number of times. Most recently, in the week leading up to the October report. Treasuries got brutally hammered in the days leading up to the report and naturally, the report printed wildly positive ... "no slowdown" read the headlines. Well, that was the bottom. Anybody who bought Treasuries an hour after that number hit made a small fortune. I don't have the stones to test my theory out with dollars before the report, but I'd be suprised if we didn't get a very good number. Like I said, i'll be in there buying 2 years shortly afterward.
Here's and interesting spin on things>>>> http://bigpicture.typepad.com/comments/2008/04/unemployment-cl.html
Short-sell the 117/118 strangle before the number is released? Maybe take out some premium after the number comes out? :eek:
Markets are bloated so the true number comes out but not a shock. Then again, it's all about Mr. Beeks.