Interdum stultus opportuna loquitur...

Tuesday, August 24, 2004

Bias Change... niiiice

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Fed repurchase was an overnight repo totalling $6.5bn, with $6.0bn in T-backed. So, despite a selling bias (see yesterday), it was mandatory to "step up to the plate" at midnight, on the long side. And because the "Excess repo" was only $1bn, there should only have been a couple of points in it.
The setup worked again - it always does - but only for the most marginal of gains.
Not that it matters anyhow - I was asleep. No repo-pump-funded lollies for GT.
After the repo pump was over, the switch to a selling bias "worked" like a charm; the market fell 6.5 points in 35 minutes. Not that it matters... I was asleep.
Still, it's nice to know that the bias change was right; on a night like it has been thus far, an intraday buying bias would be enormously frustrating.
There was a decent sized bounce (from about 2:15 a.m.) which was genuinely tradable - 5 points from bottom to top - but trading with my method, that would only just have made up for earlier losses which would have been caused if I had been
  1. awake; and
  2. stupid enough to ignore my own bias change.
When the market is in this sort of mood (diffident-to-sullen, rather than angry), trading the short side is reasonably low-stress, since the market is "lubricated" downwards. Trying to trade long is like trying to swim butterfly through a vat of cold porridge. Sure, if you happen to jump long just nefore a big program trade "goes off", you're laughing. But most of the day, any move upwards is a grind.
There is a bit of a "rescue effort" being attempted as I write; that is usually not a good sign. If da Boyz have to wait until lunchtime to try and perpetrate their manipulative machinations, it's not a good sign.
On a down day, the low is usually set in the last 90 minutes; tht means another trip back towards 1092 before the close; its' 1096.50 now... I would use 1098 as the stop.