UST Market Profile Review - There Is A Battle In The Belly And The Shorts Are In The Lead

govttrader's picture

Last Tuesday there was a ZN seller from 133-24+ --> 133-19+
Market then traded down to 133-09 and went sideways for 3 low volume days
Monday there was a decent volume ZN buyer from 133-19 --> 133-22+, after which the market returned to 133-17+.

The market has spent the majority of its time today (both before and after the buying) around 133-17+.  Though not very dramatic, I would call that a small "face" to the buyer.  While it is possible that the buyer was actually short covering and not a fresh buyer, I'm not inclined to think so.  With Monday's buyer positioned @ 133-21+ (avg price of buys), and the seller positioned @ 133-23 (avg price of sales), the distance between these 2 traders is small, and yet the seller still seems in control (market has not been able to stay above the buyers price).  While we can't know who will ultimately win out, we will know when it happens.  Either there will be a long liquidation event, or there will be a short covering event.  Both are predicated on pain and commitment, and both will be violent.

While I still believe there will be an attempt for a UST rally for month-end, that may not happen until Thursday / Friday.  In the meantime, we have what seems to be 2 large traders battling it out.

More later...govttrader out

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Mr Lennon Hendrix's picture

Although technicals are always appreciated on ZH, philosophy of investing is much more important. 

What does the auther think concerning the artificial demand in the bond market?  Specifically, can the Fed keep rates this low for long?

govttrader's picture

Please understand that i, the author, am predominately a day-trader.  My normal daily goal in trading ZN futures is to make 4-6 ticks (i don't enter the market if i don't think i have the chance to make that).  On days where I make 8-10 ticks, i'm ecstatic.  On days where i only make 1-2 ticks...i'm "meh."  On days where i lose money...i'm usually tearing my hair out.

SAT 800's picture

Short 5 contracts of ZN from a price order at 133-20. Expect to pyramid on the way down. this turkey is cooked; put a  fork in it. Planning to eat crow instead at 135 even. I can afford it; and it ain't gonna happen.

new game's picture

LOL and to think this crap will help you win.

news flash::::::::::::::::::::::::::::::::::::HOUSE WINS EVERY TIME

AND YOU AINT IN THIS CLUB-wake the fuck up...

WhiteNight123129's picture

The house (central bank) does not always win (Check BoE in 1825 and 1839). If treasuries get negative on the 10 years, I think your Gold and Silver will shoot to the Mars NASA mission. Besides, the other way to play the treasuries short is to own tobacco shares long, they always beat treasuries in declining yield and increasing yield. If the yiedl on treasuries decline, your carry is positive on Tobacco. Tobacco shares have 4% standard deviation in earnings versus the consensus. This is the most stable consumption habit of all, and the dividend keep increasing, the Treasuries can not beat this carry period. If we have reflation, Gov bonds get wacked, P multiple on tobacco shares gets wacked, but Tobacco shares reprice inflation easily so your nominal dividend shoot up. TObacco was a form of money in Virginia colonies and it is still in jails..

Tobacco shares are like bonds on steroids. The dividend is rock solid yet is not nominally fixed. In deflation and recession cigarettes do not go down in price. In inflation they reprice it easily.

You can check teh short Japanese Gov Bonds against Japan Tobacco, you might not have made money if you were short the JGBs but you would if you were long Japan Toabacco against it.


WhiteNight123129's picture

CHeck the chart of MO on the longest period, check the price of processed tobacco on Bloomberg. Both follow money printing like clockwork. However during hte 1866 -1896 deflationary period where the consumption of tobacco boomed, while the monetary system went from paper to Silver demonetization to return to 1879, the price fo tobacco went down...

NotApplicable's picture

LOL, the BoE lost?

Three Hundred and Eighteen years of survival, yet a mere mortal like you thinks they haven't won?

Boy, you trader types sure have a damn hard time measuring time in anything but milliseconds.

WhiteNight123129's picture

NotApplicable, you should know about the panic of 1825. The Bank of England had to be bailed-out by another central bank.

Now who will bail out hte Fed? By the time we get there, thinks could look funny.

There are plenty of books describing the panic of 1825 in the BoE but check this quick link.


NotApplicable's picture

You just made my point. the BoE didn't die (as it should've), but got bailed out. Hence, they won.

As for today, the only limit to the amount of IOUs needed to bail-out everyone (ignoring the nonsense of everybody owing everybody else), is our acceptance or denial of these notes in exchange for goods and services. Given that barter is the only wide-scale alternative, people aren't going to be abandoning fiat anytime soon.

So, will we wake up and cause hyper-inflation, or will we remain in denial and muddle-through our lives with our wealth being stolen our from under us?

That's the only relevant question in a fiat, IOU system of currency.

Oh, and I apologize for my bitterness, but I'm about sick to death of trader types who despite knowing deep-down that the whole system is a scam, think they can profit from it. At some point, morality should come into play. Otherwise, why not get into loan-sharking, sex-trafficking, extortion and other criminal enterprises that offer a superior return on investment? After all, it's not that far removed from aiding and abetting the criminals in NY/DC who are destroying the world in order that they can own what's left.

WhiteNight123129's picture

Don t worry, I hate the market too, it is just a job. A Fucking job, my only real interest is playing oboe. Monetary history is interesting though, there are a lot things to learn.9 Millions know who Mozart was but he died so poor that he was thrown in a trench. Nobody gives a fuck about was the richest man at the time Mozart lived, except one or two deranged minds. The faster this charade ends the better for everyone. Many people operating in the market could focus on their real talent instead of torturing their brain into creating wicked trades.

Mr Lennon Hendrix's picture

And that hasn't been the only time that a Rotheschilde Banking House had to bail out another Rotheschilde Banking House.  The Brothers deRotheschilde bailed out the Spanish House, Porteguese House, and Austrian House several times during the last few centuries.

Leopold B. Scotch's picture

Whaaa...??  I hit buy instead of sell yesterday?  Whoops!

govttrader's picture

Trading the 10/30 curve (a spread) is different from trading outright duration.  Don't confuse the 2.

NotApplicable's picture

Tell me, just how will this help you when you wake up to a bank holiday, only to find all of your accounts frozen and/or empty? Meanwhile, The Bernank thanks you for your liquidity, as without shills like you, he would be left only to play with himself.

From MFG, to thee.

Good Luck!