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Gregory Levine
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Although I dabbled with a high school stock picking project, my first memorable experience of the stock market was the Dot.Com crash. My Grandmother gave me some Lucent stock to help pay for college. I vividly remember reading that Lucent was the most widely held stock in America. "If... More
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  • 1.6% GDP growth is bad for Treasuries?
    Really?

    I can understand stocks rallying on Bernanke's pledge to prop up asset prices. Makes me think this today is just a bounce on oversold conditions. One-day Wonder perhaps?
    Aug 27 5:59 PM | Link | Comment!
  • Treasury market Sign
    Yesterday, I received the sign I was looking for in the Treasury market. On bad housing and durable good order news, Treasuries initially rallied, but fell towards the end of the day. This is a clear sign that the Treasury run is getting tired.

    However, there are two factors that make the sign unconclusive. (I always want to see more than one sign anyway.) The first is the drop in the Yen after the Bank of Japan threatened quantitative easing to lower the Yen. The second is that equity markets were oversold and Treasuries overbought after their tremendous run.

    So far today (2:10), it looks like yesterday's rally has already run out of breath in the face of more bad news. I'm close to selling Treasuries, but I also don't want to get completely sucked into a very short-term view.

    Disclosure: long 30-yr Treasuries
    Tags: Treasury, bond
    Aug 26 3:10 PM | Link | 1 Comment
  • Where Do Bonds Go from Here?
    Bernanke disappointed the market by not firing up the printing machines on Tuesday. It even has a name: QE2, for quantitative easing round 2. This disappointment generated a solid market thud on Wednesday as the "buy the rumor, sell the news" traders suddenly had no news to sell. Ouch. Wednesday's market behavior was also notable as stocks reversed their two month habit of rallying on bad economic news.

    The bond market, on the other hand, has continued charging ahead stronger than ever. No doubt those who believe Treasuries are in a bubble are confused. My expectation is that this market behavior will continue. With the spector of Bernanke buying more bonds, look for the 30-yr. Treasury to gain on any news of economic weakness. This trade should hold up until either economic fundamentals improve (unlikely before next year) or Treasuries start reacting to news differently. This would entail Treasury yields rising (prices falling) on economic weakness or yields falling on better than expected economic news.

    Disclosure: long 30-yr Treasuries, short SPY, long SPY puts
    Tags: SPY, 30-yr Treasury bond
    Aug 14 6:14 PM | Link | Comment!
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