Declining Year-End Volume Creates Increased Volatility -- But Opportunities Remain
Written by Al Martin Sunday, 20 December 2009 21:32
(12-20-09) We saw the sell-off in the March Long Bond
contract in Friday’s session. However we had been looking at sell-offs as
buying opportunities, and we would look at any further decline down to the par
18 level (118.00 ) as a fresh buying opportunity.
Read more: Declining Year-End Volume Creates Increased Volatility -- But Opportunities Remain
Year-End Book-Squaring Operations Create Trading Opportunities
Written by Al Martin Sunday, 13 December 2009 22:25
(12-13-09) First of all, we had warned that there would be
year-end pressure on US Government Long Bonds. Indeed we saw that in the
auctions last week with the March contract now trading under 118. However do
not try to read too much into this, since this is a typical period of weakness,
not only for the US Treasury Bonds but indeed the treasury bonds of all
countries. We believe that the bonds are a greater buy-on-dip trade than they
have been since October and we have been trading the March Long Bonds from the
long side.
Read more: Year-End Book-Squaring Operations Create Trading Opportunities
Dubai Roils Markets Late Week
Written by Al Martin Tuesday, 01 December 2009 01:58
(11-30-09 We saw sharp rallies in the Dec. Long Bond contract late week turning
above 123 for the first time since last September. We think the Bonds
above 123 are rich and are going to need a further catalyst in order to hang
onto recent gains.
The flight to quality rally created in the Dec. Dollar contract already had
begun to fade in Friday’s session and likely will continue to fade without
fresh tensions arising from the Dubai situation.
Late Week Volatility Reaches Frightening Proportions, But Presents Record Opportunities
Written by Al Martin Sunday, 22 November 2009 21:33
(11-22-09) We saw the Long Bond contract rally late week, as we had predicted that it would in last week’s missive, and we continued to be friendly toward the Dec. Long Bond contract. We saw the contract trade above 121, and we believe that depending on Asian and Euro-Zone data coming this week, that the Long Bond contract will trade back to par 22 (122.00). We also had been warning of a short-covering rally coming in the Dollars. Indeed we saw the Dec. (DX) Dollar contract mount its consistent rally efforts late week, being turned back finally at the 7600 level. We believe, however, that a more dynamic short-covering rally is coming in the Dollars. We continue to trade them from the long side on dips.
Read more: Late Week Volatility Reaches Frightening Proportions, But Presents Record Opportunities
Industrial & Fungible Commodities Now Look Tired
Written by Al Martin Sunday, 15 November 2009 22:45
(11-15-09) Good late week trading came into the Dec. Long Bond contract as we got past last week’s series of auctions -- auctions all with good bid-to-cover ratios. The 30-year auction was considered a little weak, simply because of the yield, but the overall series of auctions were rated good or better. That resulted in a relief rally in Friday’s trade with no fresh supply coming next week. We had recommended buying the Bonds early session at 119.02, a trade that we subsequently lifted at 119.16 later in the session. We should note that the Bonds held on to most of their gains. We would expect that the Bond prices will work higher next week as the economic calendar becomes increasingly more friendly to Bonds.
Dollars fell back Friday after the Thursday rally effort. We are seeing consistent rally efforts now in the Dollar, which is not simply a short trade like it had been. We are seeing a base being built in the Dec Dollar contract around the 7500 level. On a technical basis the Dollar is as oversold as it ever has been -- since they started printing them in 1795.
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