Posted
I'm lamenting a wasted Friday... No point in sticking around today if you were paying attention up until NFP today. Everything should have been locked, or ready to lock following NFP, except for those deals that are in the floating portion of your pipeline regardless. But no... We stuck around, you and me both, and continued to watch a market that was predestined to do what it did... So I'm sorry for not simply advising you all to go home after cleaning up whatever NFP related locking you had this AM. My bad...
I did read something on line as early as yesterday that seemed to peg the situation quite well as early as yesterday:
"I'm never fond of predicting the future, but in a vacuum of data and
news, I think the default movement in bonds tomorrow is negative. In
other words, if NFP falls within a certain deviation from consensus,
regardless of whether it's better or worse, bonds lose. "
A bit timid, but I wanted to know what factors supported his conclusion, so I called him up. Next thing I hear is a voicemail greeting that sounds EXACTLY like mine. Too weird... Anyway, I left a message with my questions and got a call back later with instructions to check out THIS WEBSITE OVER THE LAST 2 WEEKS! Now, I loved the movie "Memento," but I'm still sifting through sticky notes and self-applied bic pen tatoos trying to figure out what the hell is going on....
The point of the self-aggrandizing joke is that we had some pretty clear indications for today. Once NFP was out with mixed results, further gains were the Hail Mary as opposed to the likely suggestion. Not only that, but how many times have we seen prices tank in the morning in seemingly too-aggressive of a move only to fall back to those lows by the end of the day? So I'm sorry, I should have excused all of you at 8:36AM.
You might have started to pick up on this in the LUNCH commentary, but much of what applies to today and the upcoming week would simply be repeating things that have already been written. If you don't feel like you're up to speed on that, let us know your question in the comments section. So rather than link to old posts which I know you know how to find or rewrite content that you either already grasp or aren't going to by continued beating of horses long deceased, I thought it would be easier to sum everything up in a chart. You kind of have to imagine comic book action text bubbles, or the commentator calling out the names of the fight moves from video games during an extended combo...
Yeah, there are some hidden messages and meanings in there. Anyone guess what they are? White Line? Magenta highlights?
Then just for those like myself who, despite being realists, find it's easier to get through the weekend if you can maintain a semblance of optimism, I can at least show you that rates haven't broken the trend on the downside (yet....)
Above: Test of summertime's absolute highs fails intraday on first day of test, confirms failure on 2nd day (today), but interestingly enough, stops before violating recent "higher low" uptrend.
MBS, Tsy, and LIBOR Quotes
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