Today was a snoozer for the most part. Sure, it's not a snoozer in the sense that excitement is warranted upon rallies into annual highs for MBS, but as far as flows, data, volatility, and directionality, you were better off with a good novel and your favorite pillow than trading screens and industrial strength "eye-glue." But before you start packing your overnight kit for the office tomorrow morning, check this out...
Stocks AND treasuries AND MBS are all at or near critical tests of the trends that were broken in December! Two of them (stocks and tsy's) have yet to start a trading day on the unfamiliar side of these technical barriers since first violating them in mid December. Adding spice to the mix is the data free Friday (3rd Friday of the month usually coincides with limited to no data and the final day for up to four options and/or futures contracts, earning these days, or the last hour of these days the titles of double, triple, and even quadruple witching. Volatility is often said to be a risk, but does not always show up).
With little to say about today, and nothing that hasn't been said already, the focus is on tomorrow. Could be good... Could be a reversal for the rally... Could be completely uneventful. But as far as 2010 goes, it has the most significant potential to challenge the established trend, even if that potential allows for an uneventful day. It's kinda like watching the night sky and hoping for meteor to streak across the sky.
Ok, you're dying to see the charts right?
And in stocks
You may have caught wind of Googles better than expected (but within forecast range) earnings... Their stock was actually DOWN after hours though.... Same thing for the NASDAQ... Not sure if that amounts to a "dodged bullet" or if it should be seen as raising the possibility that tomorrow could indeed be the confirmation of the epic tests for stocks tomorrow, but one thing's for sure. IF stocks happen to drop into that early December range, the dogpile on today's FTQ bid could grow big enough that the 10yr is content to stay under a 3.62% yield, an "outer limits" yield level in the 2009 range-trade.
No promises either way folks other than you're all invited to our place to watch the sky. Maybe we'll see that meteor (hopefully moving away or at least tangentially to the earth, and not crashing into it...), and maybe we won't. But as long as AQ brings his famous Prune Tang (prune juice, Tang, and some other ingredients I think...) a good time should be had by all. Do they even still sell Tang?