(ZB) Adding to short position in 30-yr Treasuries

I was actually hoping the 30-yr bond auction today would be a dud and I could exit my short positions in the futures and the OTM calls. But it looks like the Middle East has put a temporary bid under bonds. Long-term I still think there are many headwinds for bonds to move higher, so as sickening as it feels sometimes to short against a spiking chart I did it anyway. I shorted at 120'16 and also sold a MAR3 weekly 121 call for 0'31. We're right at long-term resistance at 120'26, if we break that I'm going to have to take a wait and see attitude on adding any additional short exposure. I've got my buy to cover at the recent support near 118'16.

Also, something isn't quite right with today's action. Why was oil down? Perhaps that signals the move in bonds has less to do with the Middle East and more to do with the overall equities sell off. Whatever the reasons, I am comfortable with short exposure even if it moves against me in a big way as in time the bond situation will be resolved.

E-mail: JasonAndrewHaas@aol.com

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