T-Bond trading comment (December 17, 2007)

I did not follow the market very closely today as I was stuck on an unexpected holiday due to a snow storm... But here are my thoughts about today as I was driving back towards home once the highways were cleaned.

Today, we saw the relief rally we talked about last Friday as the market was getting over-extended to the short side on strong inflation data and a depricing of the credit/liquidity crisis. Today, we saw both technical players, playing for a quick buck on a small rally, as well as more fundamental players getting hedgy about the liquidity in the market... Apparently, lots of people think that the FED's cash injection might not be enough... Also we had a flurry of new downgrades in the financial sector...

The question is, is there a lot more room to the upside on the T-Bond? Yes there could be, but right now lower prices could be seen in the very short term as the equities are due for a bit of a relief... They have been hit constantly in the last few days.

All that said, I remain very sceptical of where the price will go in the next few days... Our long position we had put on at Friday's settle was take-profited early this morning and for now we are flat... I will return back to scalping the market intra-day until more visibility comes up.