Tuesday, May 16, 2006

Buying Long Bonds, adding to Eurodollar future longs, and cutting some equity risk:

OK, today's weak core PPI data and poor housing market indicators has
led me to call the bottom in the US bond market sell-off. Think long US
bonds versus short EUR bonds will be a good trade, but for now, I've
just bought £10/tick of 30yr Jun '06 Treasury futures at 106.54, that's
a yield of about 5.22%. May look to add to it if it starts to move my
way.

And in stocks, I am reducing some risk...selling my GM position with a
view to getting back in lower (I have a feeling I'll live to regret
letting this position go, but we'll see how trading it around goes...),
I sold £7 of Jun '06 @ 25.94 and £3 of Sep '06 at 26.06...total P+L on
the GM trade is £4,481, so happy with that. Will try and trade it around
more also. And sold half my IAC (Ask.com) position, sold £10/tick of Jun
'06 @ 26.54, making a loss of £3,060 on that position, and leaving an
open position in Sep '06 of another £10/tick which is £5,000
down...yikes. But must be vigilant and cut positions when the go wrong.

And also on the US rate position, I bought more Mar '07 Eurodollar at
94.74 in £50/tick, doubling my position. Think the FED may be cutting
rates by the time this contract comes round!

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