It's that time again folks... Another year of fun in the MBS market draws to a close and we are left with but a few trading sessions between now and 2010, and even those sessions can't promise any meaningful participation or movement. We don't want to tell you to tune out for the rest of the year, but--well actually we DO WANT to tell you that, but instead we'll tell you that you can tune out as long as the market is doing what it's doing this week.
And what's it doing this week? Trading in volatile swings amidst ever-decreasing volume. The net effect is this: there's no way for us or anyone to know what the real story is in bonds this week. There's not enough participation to constitute a quorum among price movers. And so it is that the same VWAP chart we discussed last night looks little changed today despite continuing losses in price.
Hopefully between that chart and the words that preceded it, the message is clear that you may almost completely ignore charts of the actual price action. Even if we did not grant you such a permission, you might be inclined to do it anyway...
But again, pay the charts no mind. They might as well be blank until the new year. The only wild-card between now and then would be the following:
But even with a hefty debt issuance next week, much of the market will not have a chance to trade it under ideal circumstances until after the ball drops in Times Square. Beware the evil Robot *** Clark! I'm not sure if they've gotten to Seacrest yet, but I AM sure that I couldn't even imagine the destruction that would result if they had. (lost on that one? Old Simpsons episode in which it's discovered that *** Clark died long ago and is now a robot? No? Well, maybe I was watching too much TV in the 90's...)
So, with a bit of auction watching next week, I'll yet have the opportunity to say happy new year, but between now and then, for AQ and everyone in the MND family, happy holiday's to you and yours. SIFMA would also like to wish you merriment untold as they are officially kicking you out of the office now, and will not be opening the doors at all tomorrow.
Be well, and we'll see you next week!