Monday, May 18, 2015

No Lift in Bonds

Right back to your Monday selling in the Treasuries after a Friday short squeeze.  This time you can't blame Bunds for the selling, it is just Treasuries going down on its own.  And now equities don't care anymore.  The equity traders aren't going to fall for the interest rate scares anymore.  The scarecrows are gone in the equity space, all you are left with is die-hard bulls who will only get shaken out if we go back towards those lows in March around SPX 2040.

When the equity traders are comfortable, it usually makes for boring trading in the index futures.  But it does excite the daytraders who become more speculative.  I am seeing a regular dose of pump and dumps in the market these days.

Sitting on my hands, nothing exciting here.


Unknown said...

Hello, I am an aspiring trader. I would like to learn how you can tell Friday's rally was due to shorts covering. Thanks

Market Owl said...

The sharp bond rallies that happen on Friday after you get a lot of bearishness earlier in the week is usually bears puking out their underwater short positions from earlier in the week. If the market wasn't so bearish on bonds, I wouldn't have said it was short covering.

Unknown said...

Thank you for the clarification. I am purely day trader, and it sounds to me the short squeeze you mentioned is due to position traders unwind their short trades.

I'm still new to your blog, and am curious if you hold positions intraday only or over an extended period.

Thanks again

Market Owl said...

I hold positions overnight usually, do some intraday trading too.