After a pretty dull week where we have seen low volume in Bonds, and Stocks inching upwards making new highs on a daily basis, today's non farm payroll made for some nice volatility. Although the deviation wasn't that much, the number of jobs created was 25k more then the very low expectations which has now pretty much ensured the FED will continue on its path of tapering and that the economy is on the right path.
Trading wise Bonds sold off as expected, and my first instinct was to sell any rally in the spreads as the number wasn't that great and a good opportunity to fade the initial move. This worked out, although it was a slow grind as I managed to short some 23s in Sep15Dec15 Short Sterling, and nick a tick of it. Also the most obvious play I guess was selling the indices off the open, as there always seems to be a reverse reaction on the cash market open on NFP days.
The previous two Non Farms where we got very bad numbers, had the initial reaction you would expect and then reversed big time as the day went on. Now today we had a positive reaction as you would expect, but this pretty much set up the perfect storm, as we were on all time highs, VIX has slowly been rising and the risk/reward on the open, being up 8 dollars in ES and 18 dollars in Nasdaq presents a very poor buying opportunity, so on this particular occasion it made sense to short. Now whether this is going to signal a turn around to the constant buying or merely a temporary pause we will have to see.
Trading wise Bonds sold off as expected, and my first instinct was to sell any rally in the spreads as the number wasn't that great and a good opportunity to fade the initial move. This worked out, although it was a slow grind as I managed to short some 23s in Sep15Dec15 Short Sterling, and nick a tick of it. Also the most obvious play I guess was selling the indices off the open, as there always seems to be a reverse reaction on the cash market open on NFP days.
The previous two Non Farms where we got very bad numbers, had the initial reaction you would expect and then reversed big time as the day went on. Now today we had a positive reaction as you would expect, but this pretty much set up the perfect storm, as we were on all time highs, VIX has slowly been rising and the risk/reward on the open, being up 8 dollars in ES and 18 dollars in Nasdaq presents a very poor buying opportunity, so on this particular occasion it made sense to short. Now whether this is going to signal a turn around to the constant buying or merely a temporary pause we will have to see.
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