Liquidity Vacuum

The German Bund market is trading like a penny stock.  There are giant moves down and then just as massive reversals higher.  We got another V bottom today in the German Bunds, after taking the yield to 99 bps, obviously someone was buying with both hands at 1.00% support.  From high to low, Bunds moved 16 bps, closing at 83 bps.  That is a hammer if I ever saw one, not that technical analysis means anything.  All it proves is that predatory HFTs can take a supposedly liquid market to extremes by pushing losing hands into their stop out levels on the way down, and then go the other way, buying and buying until short selling faders puke out their positions on the other side of the V.  This is a paradise for predatory HFTs that wait for real money trades, the piece of meat dangling in front of algo driven sharks.

We finally got a selloff here in the S&P, as we continue to trade sideways, continuing a mind numbing dull trade.  You cannot pay me to trade the S&P here.  I will not touch this action, it is completely devoid of emotion and edge.  I am sure the HFTs are the majority of the volume here, as no human in their right mind except degenerate gamblers and hedgers would trade this dreck.

It is getting very close to the point where you can get long Treasuries and Bunds for a long term hold.  2.47% 10 yr yields and 1.08% 10 yr Bunds are attractive levels to buy for the long term.  Perhaps a strong nonfarm payrolls report and a more hawkish Fed in June will be the catalyst to get to those levels.