Thursday, August 9, 2012

Where will the top of the bell curve land today?

Given the perfect day dealers are (or should be) having, lets see what Market Profile has to say.

The 133-13 price area has indeed sucked in the market again.  Will this price area remain the center of value thru tomorow?  Probably not.  But for today...quite possibly.  Think of the bell curve like a planet with gravity.  The farther away from the center of mass...the higher the probability to be pulled back to that center...until you reach escape velocity and are gravitated to some new center of mass.  This takes time and energy.

Most likely, 133-21 will be too high  (we might not even get there today) for the balance of the day and will allow the current center of value (ZN @ 133-13) to reign in the market.  However, after that happens..all bets are off.  We have had a 35 basis point auction concession over the last 2 weeks...and that needs to be alleviated over the next 2 weeks as the Fed embarks on buying back 10bln of the 16bln 30yr bonds just sold by the treasury.  Take that to the algo bitchez.

govttrader out....