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View Full Version : Phirang's next trade: long TLT



phirang
05-13-09, 08:13 PM
Tomorrow, assuming things go as I expect they will (badly), I will build a long TLT position. I'm targeting yield of around 2.7% to take profits, with max greed at 2.6%.

ddn3f
05-13-09, 08:17 PM
So are you expecting the market to have a big down day tomorrow? That means the money will be driven to safe haven bonds and gold?

phirang
05-13-09, 08:27 PM
I'm expecting some serious pain in the S&P, but I'm going to wait till open to decide whether or not to execute. Overnight action and pre-market schenannigans may delay my attack...

ddn3f
05-13-09, 08:49 PM
I hope your serious pain comes. Do you have any particular reason for the serious pain? Very overbought with some major bad news coming?

phirang
05-14-09, 09:49 AM
Catalysts: largest .gov finance bubble in the world to refinance. :D

Btw, went long TLT June 103 calls this morning. Wish me luck, gents.

Contemptuous
05-14-09, 04:33 PM
A bold call and IMO correct. I am unsure about the argument on Treasuries, but I am more on board with the argument for the USD resisting decay here contrary to a large number of prognosticators. I think it will surprisingly resist all the entirely plausible arguments for decay for another couple of years even, and it should be hard for treasuries to collapse without the USD collapsing with them. We'll see. What I'm reading entirely supports Phirang's call for another stiff market correction here. But I don't read it as the demise of a (largish) bull run up ahead - spanning the next 3-5 years. These first steps out of the 60 year cycle low (1948) will be met with some vicious declines as well. Meanwhile we can't fault Phirang for not putting his money right on the table where his views are.

We'll see the merit of the broader market thesis clearly enough in 18 months time.

medved
05-14-09, 04:49 PM
A bold call and IMO correct. I am unsure about the argument on Treasuries, but I am more on board with the argument for the USD resisting decay here contrary to a large number of prognosticators. I think it will surprisingly resist all the entirely plausible arguments for decay for another couple of years even, and it should be hard for treasuries to collapse without the USD collapsing with them.

Why not collapsing Treasuries with rising $USD? It depends on CBs comparative jawboning abilities. At certain point some CBs will look more like "inflation fighters" than others, so respective bonds will move unpredictably up/down. Can some money move out of other currencies and out of Tbonds into Tnotes and Tbills?

What if all the long bonds collapse around the world? Are we sure $US will suffer relative to other currencies?

FRED
05-14-09, 05:20 PM
Why not collapsing Treasuries with rising $USD? It depends on CBs comparative jawboning abilities. At certain point some CBs will look more like "inflation fighters" than others, so respective bonds will move unpredictably up/down. Can some money move out of other currencies and out of Tbonds into Tnotes and Tbills?

What if all the long bonds collapse around the world? Are we sure $US will suffer relative to other currencies?

Net change in U.S. foreign currency holdings and short term assets indicates a sudden and unusual change.


http://www.itulip.com/images/foreigncurrencyholdings1960-2009.gif

goadam1
05-14-09, 07:57 PM
Net change in U.S. foreign currency holdings and short term assets indicates a sudden and unusual change.


http://www.itulip.com/images/foreigncurrencyholdings1960-2009.gif


Oh my god, your posts are like the NPR puzzler from the nytimes guy, lately.

???????????

Contemptuous
05-14-09, 08:00 PM
Fred - one thing at least seems clear - if the USD does not stage a collapse soonish, subsequent to what this chart indicates, then there is a component in the logical conclusion this chart suggests which will have been proved askew.

We can choose to set a calendar date in the future (time limit), within which the USD exchange rate must reflect a significant part of this earthquake in the foreign currency holdings.

Beyond that date, we would then concede that for the short term at least (couple or three years), the "logical conclusions" the chart points to become candidates for reexamination?

Jay
05-15-09, 04:08 AM
Don't fade the FDI.

jimmygu3
05-15-09, 03:00 PM
Net change in U.S. foreign currency holdings and short term assets indicates a sudden and unusual change.


http://www.itulip.com/images/foreigncurrencyholdings1960-2009.gif



Sorry if it's obvious to others, but what exactly is this chart measuring? To have negative foreign currency holdings, does that mean debt denominated in foreign currencies? Please enlighten me. Thanks.

Jimmy

phirang
05-15-09, 03:07 PM
Added to my TLT calls this morning on the dip. I fear monday, we'll be conveying Bulls to the glue factory...

phirang
05-18-09, 12:11 PM
I was right till the pump began again.

Oh, well, CMBX looks flushed and the fundamentals, I THINK, are still TLT-bullish. Added again today on tankage.

metalman
05-18-09, 12:34 PM
Sorry if it's obvious to others, but what exactly is this chart measuring? To have negative foreign currency holdings, does that mean debt denominated in foreign currencies? Please enlighten me. Thanks.

Jimmy

have no idea what this chart means. anyone?

metalman
05-18-09, 12:36 PM
Added to my TLT calls this morning on the dip. I fear monday, we'll be conveying Bulls to the glue factory...

wups... dow up 2%. (http://finance.yahoo.com/q?s=%5EDJI)

this is why metalman don't trade. comforting to know that smart guys who do make the same mistakes i used to make before i gave up trying to trade.

phirang
05-18-09, 12:43 PM
wups... dow up 2%. (http://finance.yahoo.com/q?s=%5EDJI)

this is why metalman don't trade. comforting to know that smart guys who do make the same mistakes i used to make before i gave up trying to trade.

I ignore equity markets in general and only focus on abx/cmbx/fx etc when making ANY directional trade, including in equities etc.

CMBX is flushed-out: there's little "upside" left in lower-rated cmbx. The Fed is propping up the markets a bit longer for a few more DI's to recapitalise, but aside from that...

CanuckinTX
05-18-09, 12:51 PM
I'll take a guess - US is essentially selling other currencies, ie. propping up the US$ to the tune of almost $300B?

sishya
05-18-09, 04:36 PM
I ignore equity markets in general and only focus on abx/cmbx/fx etc when making ANY directional trade, including in equities etc.

CMBX is flushed-out: there's little "upside" left in lower-rated cmbx. The Fed is propping up the markets a bit longer for a few more DI's to recapitalise, but aside from that...

The Finster's dollar index have proved very good, in sensing how the market will behave. Also it does not have much volatility. If Finster updates this Graph once in 2 days, I think it will give a good idea. I have used it in a macro sense and have personally profited from it. So far it points - a equities up and Govt Bonds down.

phirang
05-18-09, 05:09 PM
The Finster's dollar index have proved very good, in sensing how the market will behave. Also it does not have much volatility. If Finster updates this Graph once in 2 days, I think it will give a good idea. I have used it in a macro sense and have personally profited from it. So far it points - a equities up and Govt Bonds down.

Yea, I got shellacked today in TLT, but the story is pretty simple: credit markets are flushed, and so the Fed's work is more or less done. Even Geithner said things have, "stabilized".

But frankly, wtf do I know! :D

rogermexico
05-18-09, 08:16 PM
have no idea what this chart means. anyone?

I am not sure but would guess it's the beginnings of dollar repatriation - the harbinger of cost-push inflation? (poom)

Hard to square with dollar strength, though.

US govt. buying-in dollars to prop USD up?

Jim Nickerson
05-19-09, 11:14 PM
David Rosenberg now at Gluskin Sheff in Ca. May 19, 2009




As for bonds, we note after looking at 60 years worth of data, that the
yield on the 10-year Treasury note has never before bottomed before the
unemployment rate peaks. And, even the most optimistic forecaster does
not have the jobless rate hitting its peak until 2010. Keep in mind that
the low in the 10-year Treasury yield was 2.03% back in December. So a
new low could well be below 2.03% if history can be used as a guidepost
in this case.

In other words, it is unlikely that we have crossed the Rubicon into new bull market terrain and that the fundamental lows have been put in. As a result, the best advice is for active rather than passive investment strategies, and to maintain a conservative income-oriented tilt over the near-to-intermediate term across asset classes.


From a PDF on Zerohedge tonight.