Monday Mornings are for Great Calls

Here's my play book for the week ahead. We're actually closed Monday so it will give you a bit of extra time to digest what you'd do with these.

Plays for the week:

1. Using the new Ultra Long Bond (UB), I would like to put on a BOB (UB vs US) vs a NOB (US vs TY). Broken down, the US portion actually cancles itself out and what you're left with is a Long UB position vs. a Short TY position. Here's the ratio used: +28 @ 121.25 UL and -130 @ 118.04 TY
2. The VIX is simply too high (currently 24.05). Expect the VIX to settle around 22.5 on 2/19/10
3. Euro Currency. The previous week has been a roller coaster and there is little doubt this will continue. It should stay between 1.3350 and 1.3850 as long as the Greeks keep up their end of the bargain (currently 1.3590).
4. The AUD is the personal favorite risk currency of my associate Practical Thinker (Mr. PT for short) and his call for this week is to remain between .8750 to .9050 (currently about .8840)
5. Expect the Eurodollar vs Fed Fund Sept 2010 ratio to remain in a very tight range of 31 to 32, buying dips and selling spikes (currently 31)
6. Expect the SPU to hang tight inbetween 1050 and 1090. However, a violation of the 1095 line will mean higher highs (currently 1073)
7. Finally, the Old Baron in our office has proclaimed that oil (CLH10) is a screaming buy and will settle on 2/19 right around 77.50. (it is ~$74)

This is the playbook. If this week somehow produces a market moving catalyst the play will be cover or take profits sooner than Friday. I don't anticipate any of these positions lasting for more than a week. My gut says the world is just a touch to dynamic.