Wednesday, March 18, 2009
The Short Treasuries Swing Trade is Dead
I'm not saying that traders out there can't daytrade treasuries anymore, but if anyone can honestly tell me how the treasury market is going to react to the fed buying treasuries on a day to day basis, then they'll make money on holding this instrument TBT. I honestly CAN'T, and I honestly don't believe anyone does know. And you know what? I don't trade things that I don't know how they should react. I have been out of the TBT trade since Monday (yes, I missed the massacre), and I don't plan on re-entering it. I am neither long nor short bonds -- I am just not touching them until I see how things play out when and after the monetization occurs.
Subscribe to:
Post Comments (Atom)
I bought more on the dip into the 43's. I really didnt want to raise my average into the 40's but the way things have been going for me recently I feel like every position I take turns into a winner.
ReplyDeleteTBT is one of those ones I know for sure will be higher eventually like DXO, I just don't know when.
You may be right that it pulls back more though, but in the long run yields are going to be what kills us all.
PS: TBT was only down 8% with the Fed buying a trillion. It's hardly a "massacre".. just back to the lower end of its trading range.
ReplyDeleteI admit 8% is a big one day move for the boring TBT though.. But tell me this.. If I told you the Fed was going to print a trillion, how much would you think TBT would be down? I would think a lot more than it was. The reason is they are going to have to keep printing a trillion to hold that puppy down.
I read your denninger link. It stiffens my resolve even more to not trade TBT -- when do yields spike up again? The day after? The day of, exactly when QE is completed? Where do they trade? Is the trend down but in a sine wave fashion?
ReplyDelete