Well my mind has not been clearer either.
Why take offense when none was intended?
You can indeed be right for the wrong reason.
You think a bounce is coming and I am not arguing.
I am arguing about the reason.
The FED quite simply is NOT going to raise rates.
The true contrarian play is to believe that.
I am not sure if Eurodollar COTs are meaningful or not but....
IF they are, small speculators are 100,000 contracts short eurodollar contracts and big specs are long. Are the small specs usually right? The commercials themselves seem relatively flat but net short.
Nearly everyone, Hussman, you, this board, my board, everyone thinks greenspan is going to be forced to hike in the midst of HORRIBLE job data. I got into it (politely) with treasury bears on my board. Everyone hates the damn things.
On my side I have Heinz, Tippet, Darfort and a very few others, not a widely recognized group to say the least. There is a small chance (and a better one as of today) that the next move by the FED is DOWN. Again, that is not my play, and I win as long as things merely come in SLOWER than expected.
But I fail to see how you see EVERYONE on one side of eurodollars given that all the prominent posters near unanimous opinion that hikes are looming) and given the mammoth anti-treasury sentiment.
Some of these eurodollar contracts have gone to full value as you point out. March is there. But last Dec went there too. June 2004 is headed there, and perhaps in short order DEC 04 gets there too. If you have to bet against eurodollars I might suggest March. The odds of it rising from here are slim. It is indeed 100% fully valued. I doubt you make anything but you probably would not lose anything either.
Perhaps I should short 5 contracts as a hedge. If I lose on those I would be an enormous winner elsewhere. June is more problematic. We could easily see a cut IMO and if we do you will get crucified. That said, I do not see June eurodollars as a play either way. To me they are nearly fully valued and I do not want to play for the last 8 basis points or so. I took off my June futures today thank you.
Perhaps we see a hike AFTER the election (but I doubt it) and.... futures or puts will cost you a lot more if you are wrong.
Finally the 5UST is not the other side of any trade I am in. It is merely something that time and time again I have stated that I would far far rather be long than short.
Your mind may not be more clear but I think mine is too. Furthermore the market proved my therory about jobs today and possibly (for now) proved how and why gold silver and oil just plain do not matter. Eurodollars and gold soared recently. Am I not corrrect on that?
Again, no offense intended but I think on this that I have the winning arguments, backed up by actual market performance.
Mish |
