AmenRa's Corner

A place where a skillful caddy always offers cool contemplation when it comes to your "stick" selection

Creditcane™: I am the omega of the market. Heed my warnings.

SPX
Bullish long day. Bullish thrusting was gored. Midpoint below EMA(10). Back above the trendline (3/6/09-7/1//10). Held 1041.83 again (.1459 fibo from high). No daily 3LB changes (reversal is 1071.69). QE2infinity.



DXY
Doji day. Failed the SMA(144) again. Midpoint above EMA(10). No daily 3LB changes (reversal is 83.31).




VIX
Bearish long day. Midpoint below EMA(10). Still holding below weekly 3LB mid and monthly 3LB mid. Still below the SMA(89) and now the SMA(21). Daily 3LB reversal down (reversal is 27.46).



GOLD
Spinning top day. Possible non confirmation of bullish thrusting. Still above all SMA's. Midpoint above EMA(10). Still holding onto gains (heading towards the 0%). No daily 3LB changes (reversal is 1227.00).



EURUSD
Spinning top day. Midpoint below EMA(10). Held the 23.6% retrace. Still failing the 4x1 Gann. It's above the trendline (11/27/09-3/17/10). Daily 3LB reversal up (reversal now 1.2654).



JNK
Bullish short day. Still failing to close gap. Closed above yesterdays midpoint which weakens the bears game. Still above the SMA(89) and back above the SMA(144). Midpoint below EMA(10). No daily 3LB changes (reversal is 37.72).



10YR YIELD
Bullish LONG day. Confirmed inverted hammer. There are two gaps that need to be dealt with (closed one of them today). The new 0.0% fibo retrace at 24.69 held. Midpoint below EMA(10). Below all SMA's. No daily 3LB changes (reversal is 27.81).



AUDJPY
Bullish long day. Another bullish thrusting got gored. Tested but failed the SMA(55). Midpoint below EMA(10). Closed above the 23.6% retrace at 75.5696. No daily 3LB changes (reversal is 79.1783).



DJ TRANS AVG
Bullish long day. Back above the upper trendline and the SMA(233). Still below the SMA(55) and SMA(144). Midpoint below EMA(10). No daily 3LB changes (reversal is 4236.96). Avoided a weekly 3LB reversal (how? why?).



GS
Bearish short day. Below all SMA's. Midpoint below the EMA(10). Slowly inching lower (well not anymore). New low on daily 3LB (reversal is 146.74).

LEFTBACK'S BOND REPORT

The Bond Report 8.27.10

Heh heh heh.. this isn't your grandfather's bond market, is it? Credit markets used to be like lawn bowls, with 0.1% moves on the day, duly noted by learned scribes. Now it's up and down 2% a day, a sure sign that those bad boys, the highly leveraged hedge funds, have probably entered the fray.

Is nothing sacred? Bond trading should be like croquet, with elegantly dressed participants skillfully outwitting each other between sips of Bollinger. Suddenly it's like the WWF or the most bitter of college football rivalries, like Michigan v Ohio State, or Alabama v Auburn.

Here's KEITH JACKSON's take on the action:

"Whoa, Nellie! Folks, we got a real BARN-BURNER going on here in the credit market. You can tell that these BOND BULLS and BEARS just don't like each other a whole lot, we got a lot of good old-fashioned hittin' goin' on, and looky here, the LONG BOND seems to slow to get up, after being GANG TACKLED in the backfield, folks...."

Thanks, Keith. Well, it was a RISK-ON day, I think we all know that, as market participants heard the helicopters hovering and threatening to drop dollar bills on an unsuspecting populace. Today was a massive STEEPENER, with duration being sold in all markets. The 5y Ts were sold as well as investors sought out higher yield. HY outperformed IG, which had been looking rich in any case of late. Even TIPS were sold on a Flight From Quality. Doing the math, LB would say that there must be a lot of cash on hand, participants are waiting for developments.

Corpies: LQD -0.90%; AGG -0.55%; JNK 0.62%; HYG -0.11%;
Govies: TLT -2.83%; IEI -0.58%; TIP -0.59%
Hedgies: TBT 5.66%

Kudos to anyone who shorted the long bond last night - that was a ripper, we were simply not trading Ts due to lack of liquidity (poor planning). We did nothing, but smiled at the thought of having booked a 15% or so gain in TLT before today's slaughter. High volatility is often a characteristic of turns in the market, so yields may rise a little here. In fact, the Fed would like credit market participants to take on more risk. This is the intent of the QE lite.

Overall, the POMOs should keep a bid under the Treasury market and we see a quiet period for Ts and some tightening of spreads ahead. That's what we are counting on as we have moved out on the risk curve in search of yield, and will buy Ts from time to time as a hedge.