Phil Grossfield's Blog

Richard Pryor – Omit The Logic. I watched this Showtime documentary on the life of Richard Pryor, one of my comedic favorites of all time. It’s a fascinating look into his genius, his dedication, and his spirit. It also reveals his weaknesses and ultimate destiny. Undoubtedly he changed comedy forever…just ask Eddie Murphy or any of the great ones to follow. My favorite of all is the SNL skit with Pryor and Chevy Chase doing Word Association…this was very controversial at the time since these words were not permitted on T.V. so it exemplifies Pryor’s modus operandi. Check it out and enjoy!  I highly recommend you check out the documentary too…here is a short trailer.

Last Night’s Game:  I will comment only by referring you to my previous posts…let me know if you have any questions….

• Miami Heat Will Win The NBA Championship
• You’re All Punks!

My Schedule: Available all day….

My Market Watch: Do The Hustle!  Bonds Down and Dancing On A Critical Floor – Prices Worse  
The 30-year bond is down again this morning about -22bps. However, Interbank’s rates were published at 11a and since that time there has been little activity. Put another way, its reasonable to conclude Interbank has already priced in the -20 or so basis point downturn.

And get this…the Fed President from St. Louis mentioned this morning that the Fed might continue aggressive asset purchasing , also known as Quantitative Easing, and still traders are not buying bonds. This is not good. From my perspective, when he reinforced the idea of purchasing bonds traders should have sold off stocks and bought bonds and pricing should have improved. But despite the statement bonds remain lower. Ouch. No bueno.

There’s more bad news. First, Tuesdays have been historically awful for bonds for some time now…that makes me very nervous for tomorrow. But more importantly the bond is dancing on a critical floor of support – the Garage in my graphic below. Remember, traders look for past behavior of how stocks and bonds were bought and sold to make a best guess on what to do now. More specifically, they look to “Moving Averages” which are commonly referred to as floors of support and ceilings of resistance. You can read about it on my Blog – I use the Glass Elevator Analogy.  On Friday the bond took a nasty downturn and this morning started out where it left off. The bond has been dancing between the Lobby and the Garage. If the bond drops below the Garage (which is $99.50) then it will fall -100bps further and pricing could worsen by as much as -0.500 or more. If you’re watching the bond and you see it fall below $99.50 then lock immediately if you can. Let me know if you want to discuss….