Traders Will Attempt To Profit on Year End Rally in Equities

Written by Al Martin Wednesday, 28 December 2011 01:22

(12-27-11) The Santa Claus Rally went missing this year because they didn’t have the news flows to support it with the ongoing problems in Europe.

The March Bonds were hit hard in Friday’s trade. We had shorted the Bonds at 143.03. It took a whole point out of them by the close.  We bought the Bonds again at 142.02 on the closing bell as the Bonds are now significantly oversold relative to the action in the equities.

The March Dollar contract, after hitting resistance in the 80.35-45 area, as we predicted, is now being turned back from that resistance area. We would expect the Dollar to trade lower this week. However longer term or medium term prospects for the Dollar still look higher.

Feb. Oil is now rallying above $100, thus far presenting good shorting opportunities. However Oil is not quite ready to trade above $100 on a regular basis. We will continue to short the Oil at 100.23 or better, until Oil starts establishing closes above $100.

The Feb. Gold contract will likely come under more pressure this week. We think another test below $1600 is likely. We had shorted the contract on the close Thursday at 1606.70, and we would expect a test down to the 1580 by  the end of the year.

Read more: Traders Will Attempt To Profit on Year End Rally in Equities


Late Week Short Covering Sets Up Choice Opportunities

Written by Al Martin Monday, 19 December 2011 04:09

(12-18-11) We saw Friday night that Moody's downgraded Belgium two notches. It was widely rumored in late Friday action that a downgrade of some Euro country was coming, although nobody was sure which one in its continuing  Euro Downgrade Conspiracy  to attempt to push France and Germany into a resolution. We would expect the markets will continue to try to trend lower in the coming week’s trade, as hopes for the Santa Claus rally are all but gone.

We bought the March Long Bonds again at 144.12 the same place we had bought them in Thursday's trade. We were sellers Friday on our standing order at 145.12. Bonds held on to their late bid, despite fresh supply of the short end of the Treasuries coming in next week’s trade. We would expect the Long Bonds to remain well-bid and continue to look to trade them from the long side on dips.

Read more: Late Week Short Covering Sets Up Choice Opportunities


From Friday's Bogus Rally (Fresh Shorting Opportunities) to Surplus Planet

Written by Al Martin Monday, 12 December 2011 05:20

(12-11-11)   In an interesting note, it would appear that 2012 will be a redux of 1975, wherein we will see all soft and tropical commodities on the planet, as well as industrial metals, move into surpluses.

On Friday we saw equity markets rally, based on yet another failed Grand Euro-Confab. Global equity markets are now responding to rallies on European failures, which are now translated to being a success simply because the Europeans prevented everything from falling apart.

For another week.

 As a consequence, we saw the March Treasury Bonds, which had held up well in Thursday's trade, finally come down. Our 141.31 sell-stops were hit in Friday’s trade. We were filled at 141.29, covering on our standing order at 141.05.

We had actually bought the Bonds back in again and are now net long at 140.30, as we would expect the Bonds to recover in early week trade.

Read more: From Friday's Bogus Rally (Fresh Shorting Opportunities) to Surplus Planet


From Early Shill Effort to Grand Euro Confab

Written by Al Martin Monday, 05 December 2011 20:12

(12-5-11) Based on Friday’s action and the 8:30 unemployment number, we would expect the equities to move higher in early Sunday night trade with US Treasuries moving lower. We will stop trading the December Long Bond contract on Monday and begin trading the March contract as the December contract grows increasingly illiquid.

Read more: From Early Shill Effort to Grand Euro Confab


Risk Perceptions Have Changed

Written by Al Martin Monday, 28 November 2011 03:35

(11-27-11) In late week semi-holiday action, we saw the price of  US Treasury Bonds come under pressure, due principally to the failure of last week's German Bund auction.

Indeed we began, for the first time in two weeks, trading the December Long Bond contract from the short side, wherein we were consistent short sellers on rallies above 144.17.

The trade in Bonds has now changed as global confidence in Bonds has been lost. US Treasuries are also falling prey due to this global loss of Bond confidence.

For now we would start to trade the Bonds from the short side on rallies up to 44.5 or better.

 The Dec. Dollar contract continues to rise, being fed by the lack of confidence in Gold and Bonds. We have blown out 79.30 - 40 resistance area in the December contract. We would expect the 80.30 - 40 next up resistance zone to be hit in the coming week’s trade.

Read more: Risk Perceptions Have Changed


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