Friday, May 9, 2014

Don't Microtrade

Yesterday confirmed without a doubt that the money is aggressively seeking safety.  As the Russell continued to underperform, even as the S&P was up sharply from the open, bonds were making new highs for the year.  Another new high in the ZB and ZN June contracts before a bad 30 year auction put an abrupt end to the euphoria.  I was hoping for a bit more pullback this morning and I didn't get it, and there is no way I am going to miss out on a bigger move, so I am back long in bonds, paying up a little over what I sold yesterday.  I will stay long barring a blowoff top.  Microtrading to try to catch small little moves sounds good on paper but is usually counterproductive.  It is hard to just sit still with a good position when you are watching the market all day.  Lesson learned.  

There is a reason the VIX is at 13.43.  The market is going nowhere fast.  In other words, we are chopping around intraday, but ending up near the same place week after week.  It has been a fader's market in equities.  It's funny how basically we end flat on the day, but just because we sold off in the afternoon and made a so-called bearish candle on the charts,  it's supposedly a bad sign.  Not saying its bullish or bearish, but these so-called bearish patterns usually don't have much predictive ability.  

Just riding the uptrend in bonds and hoping for equity market weakness, but not betting on it.  Same old, same old.

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