It seemed like your standard day, no real volume anywhere, the ES made back a 12 dollar early loss, as it always tends to do and Spreads were not moving much, until news crossed the wires of a Malaysian Airline plane being shot down over the border of Ukraine and Russia, instantly you had an immediate sell of in Stocks, and the Bunds which were already trading over 148, shot up even further as safe haven buying pushed it up to 148.50 which are all time highs!
Its crazy at these levels and I will be shorting it tomorrow buying calls as protection. This has been my strategy of late, as there is so much whipsawing that its hard to stay long/short playing with stops, but its a matter of just holding the position regardless of how much your offside, and this is best done buying Calls against your position. I have been short ES for a bit of time, and today it finally worked out, although It would have been nicer had it just gone down without the need for a fatal Plane crash. I'm hoping there is some follow through and this isn't simply another opportunity for people to load up as they have been doing of late, but we shall see if there is any legs in this latest move down. Bare in mind we were at all time highs yesterday, so there could be a bit of a way to go, its barely come off over 1%.
On the Spread front I have been trading alot more Eurodollars as there is a lot more volume, and it makes a much better trade. Theres a solid 300k Contracts being traded in many of the months, which is a big difference to the Euribor which is struggling to get over 10k contracts on certain months. There was a time when 100k was the norm, for the 5th to 8th month out, then when times were bad it was 40k, and now its struggling to hit 20k and I suspect this wont change until the ECB mega easy policy changes.
Going forward not much data out tomorrow, but there's likely to still be spill over effects from today's tragedy, and now Israel is sending tanks into Gaza, so middle eastern tensions continue which will keep Bonds bid.
Its crazy at these levels and I will be shorting it tomorrow buying calls as protection. This has been my strategy of late, as there is so much whipsawing that its hard to stay long/short playing with stops, but its a matter of just holding the position regardless of how much your offside, and this is best done buying Calls against your position. I have been short ES for a bit of time, and today it finally worked out, although It would have been nicer had it just gone down without the need for a fatal Plane crash. I'm hoping there is some follow through and this isn't simply another opportunity for people to load up as they have been doing of late, but we shall see if there is any legs in this latest move down. Bare in mind we were at all time highs yesterday, so there could be a bit of a way to go, its barely come off over 1%.
On the Spread front I have been trading alot more Eurodollars as there is a lot more volume, and it makes a much better trade. Theres a solid 300k Contracts being traded in many of the months, which is a big difference to the Euribor which is struggling to get over 10k contracts on certain months. There was a time when 100k was the norm, for the 5th to 8th month out, then when times were bad it was 40k, and now its struggling to hit 20k and I suspect this wont change until the ECB mega easy policy changes.
Going forward not much data out tomorrow, but there's likely to still be spill over effects from today's tragedy, and now Israel is sending tanks into Gaza, so middle eastern tensions continue which will keep Bonds bid.
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