Thank you sir may I have another.
I realize that I am taking a rather strong position, opinion wise anyway, in terms of my view on where long term interest rates are heading in the 2nd quarter. Sometimes doing this can require a bit of pain tolerance, so manage your money wisely.
Lest you think I’m fond of sea barnacle suppositories I assure you that is not the case. Nor have I taken leave of my senses. Nor am I unaware of all the bullish bullshit that’s out there. Furthermore as interest rates in the long end at this very moment have not begun to move higher with any momentum I remain a steadfast seller at this time, and right now the higher they go the better the sale. Why? Because the charts tell me to be short fixed income in the longer end of the curve. I have already shown you what I am looking at and with the help of some colleagues I am continuing to challenge my own outlook but so far have not been deterred. Where and when do I stop? This is a long term trade, as I do not plan to cover until the first or second week of June. Or if commodity prices collapse and trade below the Feb. 5th low of 256.89.
The disclaimer says that commodity trading involves leverage and the risks involved in trading are enormous. Therefore I recommend that you are reading these pages at your own risk. I further advise that you consult a qualified financial analyst before you consider trading commodities for your own account. Currently I have a bug on my blog and when I tell you to click the disclaimer you are sent to the wrong page. That will be remedied but in the mean time when I say read the disclaimer, you may call me at 01 312 432 5082 and I will make sure you find it.
Again this trade relies on commodity prices moving higher, the CRB chart mimics the 10yr. yields very closely.
Below is the composition of the CRB index I found on google from 2006. I am assuming the weightings have not changed since then, I will check on it later today when NYMEX opens.
1. Aluminum (6%) No chart yet
2.
3. Coffee (5%) No chart yet but looks depressed like sugar
4. Copper (6%) Looks fairly robust
5. Corn (6%) Not too exciting
6. Cotton (5%) Quite strong see chart belw
7. Crude oil (23%) Weekly picture so prices holding yearly highs
8. Gold (6%) $25.00 off the Nov high but still a very strong chart.
9. Heating oil (5%) Similar to crude
10. Lean Hogs (1%) Like cattle – huge rally in 1st 2 weeks of Mar.
11.Live cattle (6%) Cattle charts look very strong. Currently trading around $109.
12. Natural Gas (6%) Daily chart looks bearish weekly more neutral
13. Nickel (1%) no comment
14. Orange juice (1%) see chart prices topped 3/8 week but still firm
15. Silver (1%) Prices trending lower but are off the Feb. 5th lows.
16. Soy beans (6%) Similar to corn a bit more depressed
17. Sugar (5%) Very depressed see chart below
18. Unleaded Gas (5%) Fairly strong at yearly highes
19. Wheat (1%) Similar to corn a bit more depressed
Below are some charts on the components, time did not allow to gather all at this time, but will be watching and reporting on all during this campaign. Rest assured.
Copper charts and a few others are shown below.
Open interest rose a frothy 46K yesterday in 10yr. futures meaning that there will be capitulation and some decent fuel on a sustained move. Do take note it has been building quite a bit for several weeks now gaining over 100K since the 8th of Mar. for example. So some strong hands are coming into this market make no mistake about it. Option trade was rather subdued in treasuries yesterday players are listed below.
10yr.
287
Bot
1000
M16P
37
11707+/08
684
Bot
2000
M16p
39
11708+-09
684
Bot
1500
+K16P/-K18+C
4
11708
685
Bot
500
J17 Stdl
43
11700+-01
714
Bot
1600
M12+/13+p
4
287
Sold
1100
M15P
26
^M11702
660
Sold
1000
K+16p/17p 2x1
Even
11707-08
685
Sold
500
M15/19 STG
46
11707+/08
714
Sold
750
J15+/17P
11
11707+/08
714
Sold
1000
J16+P
6
^M11706
830
Sold
500
J16+p
7
^M11706
30yr.
560
Bot
1000
K+114P/J-116P
9
11727-28
560
Bot
1000
K+113/J-116P
4
11729-30
Fed Fund
287
Bot
250
M62p
.50
M9977+-78
287
Bot
200
X75/81c
1.25
X9953+-54
690
Bot
1000
X81/87c
.25
X9952+-53
690
Bot
200
X81c Covered 9953 8 delta
.25
^X9953
714
Bot
200
X75/81/87c Fly
1.25
X9953+-54
830
Bot
500
X68/75c
2.5
X9953+-54
915
Bot
1000
M50/62/75p Fly
1
M9977+-78
690
Sold
1000
X81/87c
.25
X9952+-53
714
Sold
200
X81c Covered 9953 8 delta
.25
^X9953
825
Sold
500
M50/62/75p Fly
1
M9977+-78
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