Making Sense

“There’s a big difference between probability and outcome. Probable things fail to happen—and improbable things happen—all the time.” That’s one of the most important things you can know about investment risk.” ~ Howard Marks With Fed Chair's Front and Center focus on evolving outlook of the US employment situation , this week carried extra significance and the Employment data catalyzed the move in Yields. Yields on US2s fell 35 bps (High - Low Range) and on US10s 28 bps (High - Low Range) over the week . On US2s Yields, we closed right at 3.65% and on US10s at 3.71% which is in close proximity to the braking point we mentioned earlier in the backdrop of the larger H&S Formation. We did not get the upticks towards the 4.10% handle we were hoping for. Another Trade I had thought about and did not write was the break below the 3.90% - 4.10% consolidation range but that's because consolidation break outs many times chop you out so better to trade at the top of the consolidatio...

Hi, Feels like a long hiatus since I wrote the last post. A family commitment followed by fever impeded my writing. Let me begin this post with a quote from Dreyfus and Kelly - "The task of a craftsman is not to generate meaning, but rather to cultivate in himself the skill of discerning the meanings that are already there". A trader like a craftsman, must develop the ability to acutely discern data, market narrative, the leanings and positioning all at once and constantly reassess developments in his mind. The better a trader can do this, the greater is the skill level. A lot has transpired in markets and the Economic data keeps the pendulum moving between soft landing and recessionary concerns. Let's look at the interest rate pricing and what are the points where I'm looking to fade the moves. This will be part 1 of blog post and in the second blog post we cover Economic  data prints in detail.  The Interest Rate Pricing by Sell Side Economists  is tabulated below -...