If you are following govttrader on twitter, you already know the story. Yesterday afternoon the market shifted value in US Treasuries higher, again. Using 10yr Treasury futures as our reference point, 132-28 became the center of "value" yesterday (Thursday)...after the center of value originally being 132-16 on Wednesday.
So, last night, I bought ZN @ 132-24 (documented on twitter), and this morning, sold my ZN to get flat at 133-02 (also documented on twitter) (twitter is the first place to get this info, so please subscribe to the govttrader feed for free).
The Treasury market is again seeking a price level where buyers and sellers can agree for a period of time so they can transact significant volume just like any normal day (thus far, trading volumes have been pretty slim...but price patterns have been consistent with normal trading cycles). The problem with this thinking is that we have month/year-end approaching, and there are people who MUST BUY Treasuries. I'm talking about people who job description includes "purchase US Treasuries at the end of the month." Unfortunately for those people, their job description is not a secret. Front-running is illegal in the stock market...but...buying ahead of publicly known buyers....that is not illegal. There is no guarantee that the price will go up..but trading is not about guarantees. Trading is about managing your risk, and trading strategies that have a high probability of being profitable if pursued often enough (sort of like being the house at a casino).
I don't have much "new information" to add to the dialogue at this point. Yesterday's govttrader article was pretty clear, and the twitter stream has all the relevant trading info. Let this serve as my first public plea for all you traders out there (not investors..traders only) to follow along on twitter and create a dialogue. I'm open for questions.
Oh, and by the way...the trading strategy is still "buy the dip".