T-Bond trading comment (December 12, 2007)

Okay, that was an erratic session... It almost felt like the market was a trapped mouse trying to escape but not kwnowing where to go...

Arrived this morning on downward pressure after yesterday's little panic. This subsisted until the FED came in announcing a concerted plan with other central banks to inject liquidity in the market, thus alleviating the pressure for financial institutions to fund themselves... This had an immediate impact as stock indexes soared on the news and bonds got killed... Basically the market started to deprice the credit crisis and dreamt off higher growth for next year... This did not last for very long and we found some support in the mid 114s again (We had already tested these levels on Friday). From there on we skyrocketed back towards pre-announcement levels as the market grew again aware that we were not yet out of the bush... The day was volatile but gave very nice trading opportunities as the trading was not choppy.

We got killed on our daily momentum trade which recommended to buy at 116-15, but at least we made some decent money today nibbling the market at juncture points... Did not cover for all of the the loss but at least part of it... Also still sad to have let go my Jan08 call spread on Friday...