Good afternoon (EST), Friends. The current unrest in Iraq has had some impact on currency market sentiment. Japanese investors, as is their custom when geopolitical uncertainty hits, have sold their cross-border assets and purchased Yen. This often seems counterintuitive to those who recall that Japan produces no oil, and is thus very much exposed to the impact of higher oil prices. “Risk off” trumps higher oil quotes, however, so the Yen crosses are holding up better than might otherwise by expected.
AUD/JPY positions continue to benefit from “positive carry”, that is, the higher interest rates offered by holdings in Australian Dollars relative to Yen. There’s nothing wrong with the price action on the daily chart, but neither has there been an aggressive attempt to punch through the resistance around 96.15.
Nothing dramatic is occurring in EUR/USD, at least on the daily chart, and there has been noÂ serious effort to break through the previous low at 1.3502. Plenty of traders, including institutions, expect EUR/USD to push through that level and continue lower, but there’s always the risk, as positions get stale, that frustration will lead to a squaring up and a search for more promsing trades.
One trade that did work last week for those who were already set up that wayÂ was short EUR/GBP, as Bank of England Governor Mark Carney noted that U.K. Â interest rates could conceivably beginÂ movingÂ upÂ sooner thanÂ has generallyÂ beenÂ assumed by market participants. Changes in interest rate expectations will almost always generate a response from institutional investors, and that was true in this instance. I don’t see much to do in EUR/GBP at the moment, but a retracement back to the .8055/60 level or thereabouts might offer a reasonable short entry. From there, 50 pips or so, to the area around .8010, would be a place to book partial profits, given that the recent low was .7958, while a move that continued as far as .8080 would prompt me to think about squaring up and taking another look.
Speaking of interest rate expectations, the Fed’s Open Market Committee meets this week, with the announcement expected on Wednesday at 2 PM EST. Fed Chair Yellen will hold a press conference at 2:30 PM EST. A change in interest rate policy is not expected, while the “tapering” process will likely continue at the current $10 billion per meeting rate. The FOMC will also release its economic projections and rate forecasts on Wednesday, so there could be some volatility connected with this meeting.
As always, be lucky!
Good Afternoon, Friends. There has been some interesting downside action in the E-minis, and some decent upside movement in T-note and T-bond futures today. Currencies have experienced some volatility, but without much followthrough. There isn’t anything wrong with short EUR/USD (the “Dr. Draghi” trade), but the pair continues to shy away from a confrontation with the 1.35 level. That really needs to break in order to signal aÂ revision of the previous range. If and when that occurs, the market can get busy exploring the next level of downside support, but in the interim, we’re involved in a range, albeit oneÂ with a downward bias. Sadly, there isn’t much that we can do to hurry the process along; we just have to continue to manage the ratio of potential risk to possibleÂ reward. I would expect 1.3676 to serve as a near-term top if 1.35 is going toÂ succumb soon; given that 1.34Â seems a reasonable profit target following a break to the downside, I would look to exit if 1.3676 fails to hold as resistance, although I might look to reload from better levels.
Long AUD/JPY (the “Mrs. Watanabe” trade) faces some resistance around 96.10. A move higher in oil prices would be expected to be a clear JPY negative, since Japan imports all of its oil. However, as a country that denominates debt in its own currency Â Japan tends to serve as a safe haven at times of geopolitical stress asÂ local investors repetriate funds held overseas. That may make progress in AUD/JPY slower in the near term. The trend appears to be intact, and the interest rate differential continues to favor long AUD positions. A move above 96.10 should put the previous 96.50 high into play as an objective, followed by something close to 97. On the daily chart, 94.20 looks like a reasonable reference point for a stop, but the trend remains “up”.
Here’s hoping that all of your trades are going well; best of luck
Hi, Friends. Last Thursday, which as you’ll recall was the date of the European Central Bank’s rate decisions, was a volatile day in EUR/USD, with a range of 1.3669 to 1.3502. Since then, we’ve seen a rebound from the low to 1.3676. The currency pair is currently pushing to the downside again, and expectations around the market appear to be for a retest of the 1.35 area. One of the trading maxims that seems to generally hold true is that the more often a given level is tested, the greater the velocity of the move when it finally gives way. There’s nothing etched in stone that says that EUR/USD will return to 1.3502, or that it will break if and when another test occurs. That seems to be the market’s sentiment, however, and the Euro appears to have relatively few fans at the moment.
That suggests that traders are already short, but the extent of the rebound from the initial probe lower on ThursdayÂ indicates that many vulnerable shorts have already exited positions, and the price action doesn’t point to a massive building of new ones. This remains a guessing game in currency trading, but measures of momentum, such as stochastics, are likewise not suggesting oversold conditions at this point. Under the circumstances, for those who took advantage of the bounce to short Euros, there doesn’t seem to be any reason not to continue holding those positions. I wouldn’t be wild about establishing aÂ new shortÂ around the current 1.3540Â area because the potential reward (40 or so pips, although potentially quite a bit more if a break occurs) is significantly less than the expense of a stop that could be triggered by a move back above 1.3680. To get back to a 1:1 ratio of risk to reward, EUR/USD would need to retrace to 1.3590 or so. That occurred earlier today, as well as Friday and Thursday, but we can’t trade backward.
Should the previous 1.3502 low give way, I would be looking for an initial move to 1.3455 and possibly as low as 1.34. That’s largely based on the Fibonacci extension numbers; in terms of the price action, my bias would be for a sharp move lower on a break, a retracement back to 1.35 or possibly a bit above, and then a resumption of the move lower, with 1.34 then in view as a viable target. It may well not work out that way, but trades structured with that sort of dynamic in mind should be able to maintain a reasonable relationship between likely rewards and possible risks. It is, almost always, easier to trade with a central bank thatÂ displays a determinationÂ to push its currency lower. As the case of USD/JPY can attest,Â doing soÂ isn’t always easy, but there are a lot of potential situations in which the Euro won’t look much like a safe haven. That will make it easier for institutions to maintain short positions over time, as will the interest rate differential in the Dollar’s favor.
Here’s hoping that all of your trades are going well; best of luck!
Good Morning (EST), Friends. Japanese investors are even more desperate than are most of their global counterparts for yield; interest rates have been at, or close to zero, for years. “Mrs. Watanabe” is the archetype of the Japanese housewife who invests her family’s savings in her spare time. As my late, great friend Rudi Dornbusch of MIT frequently commented, Japanese investors continue to buy Japanese Government Bonds (JGBs) because “that’s the only thing in which they haven’t lost their shirts.” Nonetheless, Mrs. Watanabe and her friends do venture abroad, and at present, AUD/JPY is back in vogue. While interest rates in Australia have moved lower, they remain substantially higher than their Japanese equivalents; a Japanese buyer of AUD can pick up roughly 2.7% annually. The trick, of course, is not to give back more than 2.7% in AUD/JPY.
The chart at the top of the page is a daily view; the one just above is a weekly. The weekly shows a move back to the 50% retracement following a long decline from the 105.40 area more than a year ago area down to 86.40 in August. The daily is more interesting; there was a textbook pullback from the 96.50 high to 93.03. The current level doesn’t represent an ideal buy point; I would be inclined to wait now to see if the previous high gives way. At that point, a starter position can be taken, with the intention of adding to it on the first pullback. If the current move ends in a lower high, a more pronounced pullback would be expected, and I’d be less enthused about building a long position. Sentiment favors long AUD/JPY, but that means that a fair number of people are already long.
The Euro came as low as 1.3502 versus the Dollar following the ECB’s decision to place negative interest rates on deposits held on its books by the region’s banks. It had a decent rebound from that level, but has sagged off again, and is trading close to the low of the day at present, in the 1.3590 neighborhood. While it’s a little disconcerting that almost everyone is looking for a move lower, that still seems to me to be correct. The rebound high was 1.3676, and I wouldn’t be happy about a short were that level to be taken out. Still, the weight appears to be to the downside, with rallies likely to be sold into until a retest of the 1.35 area occurs.
Here’s hoping that all is going well; please give me a shout with any questions or comments. I’m one of the lucky people whose vocation is also their hobby, and I can talk (or type) about markets all day long, or until at least my wife complains.
Hi, Friends. Well, the European Central Bank did cut rates across the board, setting the rate at which it will accept deposits from banks below zero (at -0.10%, to be precise). That effectively removes one safe haven except in the most violent of storms, presumably making other safe havens – short term U.S. Treasury obligations, for example -relatively more attractive, particularly in times of market stress.
It wasn’t surprising to see EUR/USD get hit on the news; what was surprising, at least to me, was its ability to hold just above 1.35 before rebounding as high as 1.3676. The action as it moved toward 1.35 suggests that a large option payout based on the pair remaining above that level was being defended ferociously. From here, my sense is that the pair is likely to trade lower, although the rebound hasn’t extended quite far enough to make short positions a “slam dunk”; a 1.37 handle would be nice, with a stop above 1.3805. In the immortal words of an English poet “You can’t always get what you want”, and it may be that 1.3676 will have to suffice as the extent of the pullback. We can’t dictate fluctuations in price; all we can do is try to put the odds in our favor and control our risk.
Speaking of Treasuries, the TLT ETF, which tracks the longer end of the yield curve, pulled back sufficiently within its uptrend to provide a reasonable long entry. For a shorter term trade, I’d be inclined to exit now on a drop below 111, but for longer term positions, a degree of support at 110 looks plausible. Stochastics remain quite oversold.
Okay, the ECB meeting and non-farm payrolls (which didn’t generate enough volatility to make me happy) are out of the way; it must be summer, and what has been a rather dull market may become a bit duller. This too shall pass; best of luck!
Good Morning (EST), Friends. Earlier today, May’s inflation reading for the Eurozone was released. It came in at 0.5%, year over year,Â versus expectations of 0.7%. The central bank’s official target is 2%. I can almost hear you saying “Great, thanks for the info, and I care because …?” Well, this one may matter for anyone trading the Euro, or bonds, and because bonds are in a constant tug of war with stocksÂ for investor dollars, it may ultimately matter to those of us who spend most of our time trading our favorite derivative, the E-mini. The European Central Bank’s (ECB) Governing Council meets on Thursday, with the policy announcement expected at 7:45 AM EST; the press conference will begin at 8:30 AM EST.
Expectations, which should be more or less baked into the current price of EUR/USD, is for a small additional cut in theÂ benchmark interest rate, currently at 0.25%. The consensus appears to be for a cut of 10 basis points, to 0.15%. There are a couple of other, less scrutinized rates that could also be cut. I think that what will have the most impact, potentially, is a decision to slap negative interest rates on bank balances (presumably above a threshold amount) held on deposit with the ECB. That would constitute a pretty aggressive maneuver, and one that could see a reaction by market participants.
EUR/USD has been trending higher since reaching a nadir of 1.2041 in July 2012, as shown on the weekly chart. It is currently around 1.3635, down from 1.3992 in early May of this year. One of the catalysts for the decline was the previous ECB meeting on May 8. At that meeting, ECB President Draghi indicated the the Governing Council would be open to additional measures to spur a mild degree of inflation, and more robust growth. Looking at the the daily EUR/USD chart at the top of this post, you’ll observe that May 8, not coincidentally,Â saw the recent high (1.3992) in EUR/USD. That was prior to the ECB announcement and Dr. Draghi’s comments; since then, the pair has largely traded lower.
So, the longer term (weekly) trend is up, the shorter (daily) trend is down, and we have a potential catalyst for volatility on Thursday that may, to some extent, already be priced in. So, how to trade it? A downside break looks easier, since on the daily chart, 1.3585 has held repeatedly. The more aggressive play would be a sell stop (with a limit) set just underneath that level; otherwise, once a new low is established, traders can look to sell the retracement in accordance with the principles described in Todd Mitchell’s courses.
An upside move will, it seems to me, be trickier. If the ECB doesn’t alter the current deposit ratesÂ (which I think is the key variable), I would expect a quick short covering rally. The problem is that 45 minutes later, Dr. Draghi could mention that this remains a possiblility, and that the Governing Council simply wants to look at additional data. That could bring a rally to a screeching (and possibly expensive) halt. I don’t have an upside level in mind; the area around 1.3750 currently looks like a place to begin thinking about shorting EUR/USD, but that could change, depending on what is or isn’t said on Thursday morning.
This is something to be aware of; if negative deposit rates are imposed, my sense is that it will be pretty positive for the USD and for U.S. fixed income (since bank deposits will be looking for a home, and will presumably prefer higher yields to lower). Friday is what I have come to think of as pay day, in the form of non-farm payrolls. I’ve been pressing harder than I should to make something happen in the E-mini futures, and have consequently been prone to overtrading, and to losing money. The non-farm payrolls report has in recent months been a nice money maker, which I’ve played by employing the techniques taught by Todd as the “First Half Hour Breakout”. Nothing works all the time, but I’ll keep going back to that well for as long as I continue to find water.
We’ll see what our friends in Frankurt do (or don’t do) on Thursday, and then what the U.S. report does on Friday. As always, be lucky!
Good Morning, Friends,
Implied volatility of 6% doesn’t seem like much, but that’s a higher level than EUR/USD has seen for a while. Elections to the European Parliament are taking place over the weekend, and there is speculation that a strong showing by Euroskeptic parties of the right and left will lead to a softer Euro. In addition, the European Central Bank’s governing council meets in early June, and is widely expected to lower headine rates, and possibly even slap negative interest rates on large deposits. Anticipation of the latter move may help to keep U.S. interest rates lower than they otherwise would be; if European rates are declining along with the currency, higher yielding Treasuries denominated in a rising Dollar may look appealing to cross-border investors.
EUR/USD isn’t at an ideal selling point; on the daily, 1.3760 would offer a nice ratio of prospective reward to risk, but it isn’t likely to reach those heights today. Friends in London speculate that while a Euro-negative result in the parliamentary elections is baked in as far as Eurozone traders are concerned, it may be more of a shock to Asian and North American players, who will then presumably want to get short, or shorter. I’m agnostic on that, but if I was playing it from my old seat on a bank desk, I would probably take some Dollar calls/Euro puts home for the weekend, just to have some exposure. The hourly chart shows Fibonacci confluence around 1.3640, and that might be a place to look to sell some Euros for what would be expected to be a fairly short term trade. It should be toughÂ for peopleÂ to buyÂ Euros for purposes other than short covering and profit taking ahead of the ECB meeting on June 5.Â Elections bring uncertainty with them, of course; that’s why they play the game. It’s entirely possible that Europe’s voters will refuse to do what we want them to do. It’s also conceivable that the market will respond in ways other than I expect, and so it’s important to keep a stop in place.
A long weekend approaches in the U.S. Wall Street etiquette dictates that most senior managers will take today off, as well as Monday. “Reports of absence” are e-mailed late on Thursday afternoon, giving the troops the good news. “I can be reached via e-mail in case of need” is always attached, but the unwritten sub-text is “And you’d better not need to”. That will reduce risk taking, and probably make for a dull afternoon unless there’s some sort of market-moving catalyst. If the latter does occur, things could get exciting, but late afternoon boredom is the expected outcome. On the daily chart, the E-minis made a new high, retraced in textbook style to a buyable level, and proceeded to move higher. The contract is now within striking distance of the 1898.50 high. We’ll see how it trades from here, but I find that I’m not spending too much time short these days.
Best of luck today, and have a great weekend.
Welcome to this edition of Dave’s Market Insights.
Signs and Advantages in Selling Puts
I want to put it all together for you today with selling a put.Â I also want to talk a little bit about Facebook. We’re going to use them as our example today.Â So when I talk about putting it all together, that means reading all the different signs that can help you in putting on a trade, making sure that you are putting yourself in a place to be successful with that trade.Â I want to talk a little bit about the advantage of selling puts, as a way to do that with that.
As we look at the chart, Facebook has been really walking sideways. The Bollinger bands have started to squeeze. Typically, when the Bollinger bands start to squeeze on a stock, index, or anything, this is usually preceded by some sort of larger move, either up or down. We don’t know really which way it’s going to go. We also know that itâ€™s energy on the fractal energies daily chart is very charged up, meaning that any day it can move a significant amount on the stock. We also know that Facebook just came out, and they’re releasing it this week with their new advertising platform on mobile. And everybody’s touting the fact that they are really doing the mobile thing right. They’re going to take over there, and they’ve actually been upgraded. So right now it’s favoring up. This means we want to want to be able to place a trade on this stock that, A, we can take advantage if the stock goes up, and B, even if it goes down, allows us to still take advantage of it.
One of the ways we can do that is by selling a put. The nice thing about selling a put is that you get paid up front; you get to make money upfront for taking on a potential risk. Another good thing is that you’re typically selling at a lower price. Looking at the chart youâ€™ll see it’s really stayed and had a good support level at 55 on Facebook. And then we can come down below that and we can see there’s another support level around 51, so 50. And then ultimately 45, right in that range is the largest level of support over the last year really. We want to be able to place a trade in any one of these areas, and be paid to do it. And that’s what we’re going to do.Â Follow along with me on the video where I go to the options change and explain how this works.[Tweet “The nice thing about selling a put is that you get paid up front; you get to make money upfront for taking on a potential risk.”]
Winning with Naked Puts (a.k.a. Uncovered Puts)
So you’re essentially giving yourself the ability to purchase the stock at a lower price in the future.
Now I don’t know about you, but understanding just the markets, understanding these high flying tech stocks and stuff, if you got Facebook at $50 and held it for the next year, to 2015, chances are it’s not going to be at $50. This is a stock that we probably will see with the likes of Apple, Google, Netflix, all these other ones that end up screaming higher, especially as it begins to make more and more money.
So it’s a good time to do this on Facebook. There are other stocks that it doesn’t make sense to do this on, but it’s a good time to look at doing this on a stock like Facebook. So that’s how selling a put can be to your advantage, no matter which way the stock goes and put you in a great position to, not only make money, but profit in a number of ways.
Thanks for tuning in, and we’ll see you in our next edition.
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Good Morning, Friends. Once upon a time, I builtÂ a moderately successful career in foreign exchange – I reached the Senior Managing Director level at a large bank – without ever learning how to read a chart. I did work for a timeÂ with people who were enthused about Elliott Wave, but they always had alternative wave counts. That meant that they were rarely wrong, but they were also hardly ever right, and, most critically, they showed no ability to make money using the method, which is the only unforgiveable sin on Wall Street. I subsequently met Robert Prechter, and found him to be an exceptionally bright and engaging individual, but that didn’t convert me to the Wave.
Traders at market making shops don’t need charts because they have the order book. At the larger firms, they aren’t trying to determine where supply and demand are; they know where clients have interest, and they also know that if a number of large institutions are, say, bidding for GBP/USD around a given level, there are likely to be othersÂ looking to do similar tradesÂ with rival banks. In the past, bank trading desks were also often willing to make large proprietary bets, sometimes employing hundreds of millions of Dollars to defend a threatened options position, for example. The largest institutional clients also typically had very little interest in charts. Their investing discipline was simply built around different inputs; for the big fixed income shops that were prominent FX market participants, changes in interest rate differentials, or shifts in the yield curve, tended to be the most scrutinized factors.
Now, I work in a home office that bears little resemblance to the large trading floors of my past. Early in my post-banking career, I recognized that the tactcs that I had spent a couple of decades learning weren’t going to do me much good. IÂ didn’t have access toÂ the order book, and I was no longer the shark; I was their potential prey. I found my way to TradingConcepts, Inc. and devoted myself to learning a new way of trading under the tutelage of Todd Mitchell. That has worked well for me for some years now, and these daysÂ it wouldn’t even occur to meÂ to try trading without having my charts in front of me. They help me to assess the balance of demand and supply in the E-mini futures (or any other asset), and to manage risk successfully. The restÂ of the retraining process has involvedÂ dealing with the quirks of myÂ psyche, for example teaching myself not to be overly eager to trade, and to beÂ more concerned with avoiding losses than with making a killing.
I still recognize, however, that institutions controlling (in the aggregate) trillions of Dollars continue to care about fundamentals and changes in the consensus view of the economy. The Fed’s Open Market Committee (FOMC) has the most direct impact on rates, and institutional investors are always eager to get a sense of potential policy changes. Today, Fed Chair Yellen is speaking at NYU’s commencement (at 11:30 EST). Given the venue – she’ll be addressing the assembled multitudes at Yankee Stadium – it seems highly unlikely that she’ll be musing about future interest rate changes, but there’s always the possibility of a headline. In addition, several other Fed officials will be permitted out in public today; New York Fed President Dudley (10 EST), Esther George of Kansas City 12:50 EST), and Narayana Kocherlakota of Minneapolis (1:30 EST) all have the potentiala to utter encouraging (or discouraging) words.
Most importantly, 2 PM EST brings last month’s (April 30, to be precise)Â FOMC minutes. This one is tricky, because it can take market participants some time to peruse it, and for sell side (that is, bank) analysts to disseminate their views as to what it all means. I once sat in a meeting with a large hedge fund manager in New York; we were interrupted by one of his underlings, who had been assigned to get the statement and underline the good parts before bringing them in to the boss. There is, consequently, the possibility of a sharp swing, as traders first react to the headlines, and then take aÂ more carefulÂ look at the actual text.
Interestingly, I ran some correlations this morning, and currently there isn’t any statistically significant relationship between the E-mini contract and Treasury notes (/ZN).Â The ratio is displayed in the lower panel of the chart. There are times when the two contracts are more closely linked, but they appear to have uncoupled at present. We’ll have to wait to see if this afternoon’s release alters that. Even though we trade technically, these fundamental inputs are worth noting, because people who have a lot ofÂ money at their command do pay close attention, and often react to them.
I don’t have much of a bias going into today’s E-mini session. A lot of people will be reluctant to do much ahead of the FOMC minutes – I would expect volume to thin out after lunchtime – and while on the daily chart the uptrend remains intact, as time goes by, and the previous high isn’t taken out, the greater the odds that a larger pullback will be needed to rebalance demand and supply. I don’t trade off the Volume Profile chart, bu I do look at it from time to time, just to getÂ sense as to where traders have been active. This chart shows the number of contracts traded at each price point for the period charted. Given enough time – this is an hourly chart of the previous 20 sessions, basically a month of trades – the distribution will resemble a normal, or bell curve. A couple of lines are worth noting; the yellow ones mark the range within which 70% of the contracts changed hands, in this case, between 1862.50 and 1880. The maroon line at 1871.50 is the Point of Control, the single price atÂ which the largest volume was transacted.
Sellers don’t appear to have had much interest below 1858, while buyers thinned out above 1880. It will, presumably, take some new impetus to break the contract out of that range. Perhaps we’ll get it this afternoon, but it seems more likely to me that we’ll continue to trade a somewhat nervous range. Over time, however, something that doesn’t come higher will start to move lower, as potential shorts become more confident, while longs become nervous, and look to protect profits rather than continue to hold on in the hope of higher prices. The overall trend, of course, has been “up” for quite some time, but changes in Fed policy could conceivably change that, as well. I doubt that will occur this afternoon, but I’m constantly surprised.
Whatever happens, best of luck!
Good Morning, Friends. Here’s hoping that you had a pleasant and restorative weekend. I find that I tend to make poor trading decisions when I’m tired or distracted, and I’ve learned that getting plenty of sleep and exercise helps me to respond well to the surprises that a trading day typically throws our way. I’ve read through the news; there are a couple of company-specific items of note (T and PFE, both M&A related). Futures have been a bit soft overnight, and slowing growth in China seems to be taking the brunt of the blame. Journalists get paid to find “reasons” for any move, after the fact, but we don’t have to take them seriously; we trade the chart that’s in front of us.
Above is the daily chart of the E-mini futures. The uptrend remains intact; in fact, the pullback from the recent high as been pretty subdued. Friday’s vertical bar, however, is an inside bar. Todd Mitchell Â spends some time on these in his courses, but generally speaking, the side that is taken out first is a “tell” for additional movement in that direction. In this case, even while trading the 3-minute chart, I’ll be keeping an eye on 1881 and 1876, since a move to one of those prices may offer a clue as to intraday sentiment. Here is Friday’s 15 minute E-mini chart, plus the (shaded) overnight session:
Once the regular session begins, I move to the regular session chart, showing today’s open versus Friday’s close, but I do look at the evening session, just to get a sense of anything interesting. I don’t see much that strikes me as remarkable here. The 1866.50, the price that showed the highest volume on Friday, continues to attract some interest when the contract trades there, but otherwise, I don’t see anything noteworthy. The next “big” news, for what it’s worth, seems likely to be the European Central Bank’s meeting on June 5. Some additional easing moves are widely expected, and this is contributing to short covering in U.S. fixed income. Here’s the daily chart of the Treasury note futures:
I think that it’s fair to say that most traders at the outset of 2014 were expecting Treasury securities to be under pressure, since the Fed is tapering its purchases. As the economy recovers, the odds of a hike in the discount rate become greater, and sentimentÂ has consequently been pretty negative. Foreign central banks and other instutitons continue on balance to be good buyers, however, and even at their current low yields, Treasuries offer a decent pickup versus European sovereign debt. Shorts have been getting squeezed, reminding us again to trade the chart, not “news” or sentiment.
Just some thoughts to start the week; let’s be lucky!