Yield chart below has a few highlights attempting to point out all the horrible things that can and do happen to get markets into an extreme conditions. As I have been noting here RSI on the weekly bond and note charts quite over sold. Market has stopped trading lower but mainly has been in a sideways pattern since the low price made on the 16th of Dec.
Point I’m trying to relay is – it is very difficult to fathom all the factors driving price action – but one thing seems to be of use and that again is technical indicators. The one indicating an oversold condition could still reward longs Understanding some of the things that caused the yields to spike back in Nov. are no longer with us hence you can start to understand why yields could move lower – even though there is no apparent over riding factor one can cling to.
Activity today with the exception of a covered call spread buyer in 10’s and some possible liquidation in June Midcurve puts is not all that inspiring. But as you can see prices creeping up a bit and given technicals will expect further gains this week.
Larger flows from this a.m. sesssion listed below:
| 1/24/2011 | |||||
| TJM | B | 3,000 | EOG91 call | 3 | 9900/00.5 |
| Paper | B | 1,000 | EDH1/EDM1 9962 strad spred | 6.5 | ^9965.5 and 56.5 |
| Paper | S | 10,000 | EOH 9887/9900 p sred | 4 | 9900 |
| Paper | S | 10,000 | EDM1 9912/9937 pspread | 2 | ^9957 |
| CCM | B | 5,000 | EOJ 9812/9837 pspred | 3.5 | 9874.5/75 |
| New Edge | S | 10,000 | EOM9850 - EDH13 9825 calend strgl. | 22 | N/A |
| Floor source believe player was short the | long the EOM 9850 puts | ||||
| Paper | B | 1,000 | EOH9912 strad | 25 | ^9901 |
| Paper | B | 500 | EDU12 9850 put | 96 | N/A |
| Paper | B | 4,000 | EDZ12 9475 puts | 9.5 | 9819/19.5 |
| 10yr. Opts | |||||
| Gelber | B | 10,000 | TYH121/122 c spread | 0.18 | ^12001 |
| Paper | B | 1,000 | TYH117.5/119.5 pspred vs. 122c | .11 pspread | 12006.5/07 |
| Paper | S | 600 | TYH120.5 strad | 1.6 | ^12010 |
| Paper | S | 500 | TYH118.5 p | 0.23 | 12009/09.5 |
| New Edge | B | 10,000 | TYH121/122 c spread | 0.21 | ^12011.5 |
| Paper | S | 2,500 | TYH118/123 strangle | 0.23 | 12011/11.5 |
| 30yr. Opts | |||||
| Paper | B | 500 | USM124c vs. sell USH122 c | 0.3 | 12015 area |
| Fed Fund opts | |||||
| Paper | B | 500 | FFQ 9900/9950 p 1X2 | 1.25 | N/A |
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