T-Bond trading comment (November 6, 2007)

For now the 114-00/05 resistance holds thanks to advancing stocks and tomorrow's 10 years auction. We arrived this morning with some choppy trading to the downside that offered plenty of opportunity for some scalping as we were bouncing from the bid to the offer all the time. The only time of the day where we had a bull run was just before Morgan Stanley announced new writedowns. This was the perfect moment to short more bonds, as recent history showed us that it was profitable to do that(eg: look at last week...). The rest of the day was on a downward slope as we went back to reach the 113-18 zone.

Does this means that the bull run is done and we are starting a new bear leg? Well no, not exactly, with the recent run to the upside, we could very well be in consolidation still... To confirm a bear leg we would need to break the 113. Just worth of mentionning, the Bund did not succeed to advance today despite rather supportive economic data. So...

Fresh beer is waiting for me.... So more tomorrow.