Subject: Eurodollar Futures / Treasuries Advance WITHOUT LONGS
On moderate volume, the Eurodollar futures advance with the yield curve flattening throughout the first 6 years. The long end, both in Eurodollars and Treasuries are outperforming as equities fall hard, distancing themselves<http://diagnosticsbycandlelight.blogspot.com/2014/09/s-500-index-no-month-end-buying-for.html> from yesterdays advance. There appears room for additional gains in fixed income as heightened conviction about a strengthening economy are questioned. There is a decent short position in place and we have seen some surveys that indicate a very low level of fixed income longs recently. Consider below a look at the JPM Treasury Investor Sentiment Active Client Long Index. There has been 11 weeks where the reading of 8 has stood. While there have been many instances where even 0 Active longs have been registered, we find it queer that so long a length of time has passed without a change in that number. My guess that the break-out from 8 will be toward higher numbers of long. For guide, since records exist from 2003, there has never been a period of successive similar marks as long as the current 11, having started in mid-July. The only other period where as many as 7 or more similar marks was in March-May '11, with the result being a spike higher to 46 longs following the last string at '8'. hmmm how many longs do you know. how confident are you that Q1 negative GDP was a fluke.