Monday, September 24, 2012

USTs remain strong as the mode continues to shift higher

Monthly cyclical forces continue to push treasuries, shifting and re-shifting the mode higher as we go.  I am still sitting on my trade of long 2 units of 10yrs vs short 2 units of 7yrs (not DV01 net long 0.5 units of 10yr with a 7/10 flattener).  With the grind higher type of price action we have seen over the last 2 days, my primary trading style of fading the edge of the bell curve has missed much of this uptrade.  I'm considering adding another cyclical trade to my portfolio (small size...perhaps 0.5 --> 1 unit out of 6) to hold for almost the entire month (short for  half - long for half).  I'm targeting 58 bps for my 7/10 curve trade...but I plan to be out of the trade before month end

govttrader out

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