wow, what a day for the 30yr bonds
In what appears to be a flight to safety the 30yrs were on fire today. The Jun futures contract is over 120 which is the highest I have seen it in a while. I am short from before the 119 calls and even with the premium and some time decay I am underwater. the US debt being used as a place of safety is almost comical but I guess perception is reality. It would be one thing if only the market went down and the bonds went up as we were taught in trading 101 but when the market moves down as a result of Greece having serious debt issues and compounded by maybe Spain having problems as well that is not a reason to buy US debt in my opinion. While the US may have a few extra dollars in the purse due to repayments from TARP ect… it is not like Washington will go to bed at night without coming up with useful ways to use the money to get re-elected umm I mean help the American people. Unless tomorrow the Treasury comes out and says “oh by the way we canceled the auctions today as we are no longer going further into debt” we are going further into debt and that will mean at some point rates will go up. I would expect the inventory to be lower tomorrow but someone help us if it isn’t. also while the fed sells off C and keeps the price of that item under $5 for the time being at some point they will run out of stock and it will be time to fire up the printers and see how many bonds we can print off and dump on those that are dumb enough to buy them at sub 5% interest for a 30year bond. Seriously, if the best idea you have to invest your money is to commit to 30 years to a country that has a debt level that is accelerating and off balance sheet accounting of obligated future payments that gives us a negative net worth then you better not be asking anyone to pay you for your advise. One thing is for sure with taking swing trades. Options are often vastly superior in that you can be wrong and still make money. the 30yr has moved over 2 points against my opening basis and I am currently down about 1 1/2 points with half of that being intrinsic value that falls every day. I also in after hours added to my bond short with a Jun 122 short that is near even as of this post.
Market down heavy but both GS and BP held up very well I thought. I covered most of my GS (options) and waiting to see if it has another leg down before adding.
I shorted one Jun MEE 33P although I had more offered and did so right before the close at 2.06. MEE has been beaten like a seal pup and any good news should give it a strong pop. So it may continue lower for the next few days but it would appear that the worst is over for large moves down with the stock. I would gather even some more bad news is not going to push it down much further.
Otherwise it was a mixed day. A few trades and one big trade with EXBD but didn’t go as well as I would have liked.
EXBD B8 signal, entered a little early with a very strong move higher. Kept going and going and traded around the position much of the day including covering at a loss. Held on to within a few minutes of the bell but didn’t want to hold overnight so flattened out with it. + 251
PSER + 33
VVUS early B8 + 34
PBR + 50
OSTK traded the reopen of the stock. This one seems to always be a good short. especially with a CEO that is more worried about the stock price than he is about making money. If he learns that making money = good stock price he will be that much further ahead. + 105
NTRI + 127
JTX lotto ticket that I took a stop loss – 71