Buying treasury futures was the right move today. If treasuries are moving solidly higher, it suggests to me that uncertainty or fear is draining cash from other securities. Gold has also rebounded very strongly today. This is another sign of market fear and uncertainty. When both gold and treasuries are rising strongly, we can take this as an omen that fear embraces the financial marketplace today. It is also possible that the Federal Reserve is buying treasuries to suppress interest rates, as they had signaled to the market that they would do in their FOMC minutes. As they do this, traders -- like me -- join the bandwagon, the prices moves higher at an even faster pace. As a short-term trader, I don't care that interest rates are artificially low, and heading lower. I'm only interested in the direction they are headed.Treasuries are my favorite instrument to trade because the futures are extremely liquid and the futures move rather slowly. The slower movement makes executions easy and accurate with minimal slippage. What more favorable conditions could a trader want?
Grain and Stock Update
Both grains and stocks opened higher, but haven't been able to solidify or add to their gains. Perhaps these are the financial instruments that are losing ground at the expense of treasury purchasing. I don't know.
Grains have lost both their edge and their gains, and are showing some weakness. For a market to move higher requires active buyers, but for a market to move lower only requires a lack of buyers (not active sellers). Perhaps grains have lost ground because the Argentine government has announced that they will permit greater exports. Since Argentine grain products compete with those of the United States, this tends to weaken prices. Needless to say, the increased supply also has the influence of suppressing prices.
Stocks are maintaining a positive day, but are struggling to do so. At this moment, the Dow is barely positive after being more than 100 points higher in early trading. Trading conditions are atrocious! It is inconceivable to me that people would be buying stocks on a day when the entire banking system is showing signs of a catastrophic risk of collapse! But the market rules, not I!
