T-Bond trading comment (November 20, 2007)

Are the bulls loosing breath ? We bounced all day round between 115-28 and 116-14 and closed at the low end of the range... Not the most bullish especially since the T-Bond is overbought, the FOMC was more or less bullish for the economy and the 116-14 level has been a resistance level in the last hours and is also a longer term resistance we had 2 years ago.

We opened the market, on the bullish side this morning after creating the low overnight on strong european equities. As the stock market opened on the strong side, the long bond scaled back from the 116-14 level. After reaching again the lows of the day, we had the Countrywide rumour... Apparently, CFC was to file for bankruptcy, but the stocks was trading a 9.8 when we heard it and in general a company on the verge of Chapter 11 is not trading at 10 bucks.... Any how, the market went back up as we waited for the Minutes. They where kind of mixed, but overall they were kind of bullish.... Afterward, the market just slowly drifted down to close at the 116 mark.

Option expiration was today and we finally took off our option strategy... Definitely not the best month... In fact the worst month in a while. The only good thing is, as the market was falling we did not cover the delta right away and were able to recoup 23% of the loss... Otherwise not a super day, with the whipsawing, trend followers got hurt and our momentum models on EDs didn't give the right direction.... Better chance next time!