A Drop In The Bucket

11:04am EDT: Don’t get me wrong – it’s good to see some red candles for a change. But I’m still a bit suspicious as we bounced right off the upper boundary of our prior channel:

If we get pulled below we could have something to work with.

The Dollar was hammered again overnight and this continues to favor equities, like it or not.

I’d like to see Silver closer to 15 at which point we’d have ourselves an A-C equality. Come on – just a little further…

11:32am EDT: I just checked and can confirm that there was a POMO auction this morning and roughly $7.3 Billion were accepted. If you leverage that 100 x you’ve got some real cash to move either treasuries or equities with. Again, I don’t want to ruin the bear party here, but if you were short this morning here is a good opportunity to perhaps grab at least partial profits. Of course all this is predicated on you buying into my tinfoil hat assumptions regarding those operations.

11:51am EDT: GamingTheMarket just posted this little bond auction game which is nefarious enough to justify exposing it to all you rats:

Here’s how the resting bid idea works for Treasury auction days.

Auction Calendar: http://www.bloomberg.com/markets/ecalendar/inde…

Last week offered some nice setups. The auctions happen at 1pm. Sometimes clear levels of resistance are made prior to the auction. One can then place a low risk buy/stop market order above the day’s range, right before the auction happens.

So you don’t know which will pop TBT or TLT. You place a buy/stop market order on both names. The name that pops will trigger your order. This won’t catch the entire move, but it’s a low stress partly automated way to make money. It also saves focus to manage the exit. Exits need to be on the same time frame as the entries.

These are 3min charts on TBT and TLT for the same two day period. You can see that TBT would fill for a quick profit and TLT would never fill. So you only have to manage the winner.

Here are his charts and the examples of how he caught those entries:

TBT (i.e. short 20-year treasury bonds)

TLT (i.e. long 20-year treasury bonds)

1:15pm EDT: I have to say I’m a bit torn here – the NQ is extremely weak and if it wasn’t for all that POMO crap I’d be short like a midget in a limbo contest. So far I’m just watching and waiting for a real move – something just doesn’t feel right today.

This entry was posted on Wednesday, August 5th, 2009 at 11:10 am and is filed under Intraday Update. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.