Aug 092010

I was saying Friday how I felt that given the significant positioning to the long side by institutional traders throughout the week that any negativity if insignificant would likely be shaken off as big traders are betting on the strength from earnings and sticking to those guns. They did as it turned out and here we sit again under the interim resistance in the high 20s. I do think there is a good chance we break through to the long side and at least get into the low to mid 30s to test the big line of grinding resistance above. That said, we will be extremely careful fading these levels in the high 20s today as they have just been hit so many times when they give it will likely be quite dramatic and insurmountable. I would love to see some more tests of the low side as I think there would be some great opportunity for rotational trades down there. Certainly the price to beat on the low side is the line of support in the 10-12 handle range and any moves under that would have to be read as quite pessimistic. The Euro has remained relatively flat though we have seen some selling late this morning and the carry trade is holding in its current state and looking to get a boost to the long side. Treasuries are flat and we have seen the yields in the 2s at record low levels. 50 basis points on the 2s. All I can say is wow. No economic new today but of course we do see good things from the trading desks at Goldman. Though they finally broke the streak it is quite enviable and this kind of news that shows there is money to be made in equities usually gives a boost to the cash markets in the short term. An 85% win rate in the streak and 5.6B in revenue. OK so they made a little more money than we did. What can I say. We are coming for them though. LOL…

 Posted by at 8:44 am

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