Tuesday, October 16, 2012

Another chance to buy a dip in UST...or should we sell stocks?

30yr bonds have traded back down to last weeks auction stop (while at the same time stocks flirted with 1450)...so...the markets are trading in line....though USTs have resisted the stock inferred selloff and outperformed on a relative basis.  There is no buyback tomorrow, and then 30yr purchase on Thursday.
























I am biased to buy a dip in UST, and am looking for the best risk vs reward entry level.  I would have preferred ES trade up to 1454 today (the upper VAC on the weekly bell curve) and then reversed to current levels.  That should have provided the best entry today in UST.  If I don't see that level trade in ES, then i may have to wait until tonight / tomorrow to recalculate the bell curve.  With long end buybacks in the remainder of the month, and 30yr USTs under-performing the curve the past couple days, I prefer putting my long in the 30yr sector.  It is still unclear if that is business for today or tomorrow.

govttrader out...

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