Anybody else short US 30 Bond

bought TBT today. i have this in my rrsp ...in cdn$....so its a bit tricky as pay for it with cdn$...usd going up. see a top forming. i am usually too early, but have learnt that if i stick it out, the market goes my way

not day trading right now...and do feel married to some trades. i make reliable money but pay loads on commission, its hard on my eyes...not to mention my nerves, and my quality of life...

so i am just swing trading to short term trading...

 

Seems like it will either stay around here and consolidate for a long time or go down to 120 or so.

 

I have no doubt that it is a bubble but I think it has more to go I'm long the 30 year bond (actually call options).

The Fed has not even started "quantitative easing" yet. It says it may do so which probably means it will do so.

Eventually it will burst but it could be another year or two. It took that long for the Japanese bond bubble to burst when they did quantitative easing in their "lost decade."

From what I hear, at that time, shorting the Japanese long bond was very popular all the way up. Most of those traders got carried out after huge losses.

 

what is quantitative easing? easing is often refers to lowering interest rates....

 

It's a fancy way of saying printing money.

 

Right they can't lower "policy rates" (the fed. funds rate etc.) any further because they are at zero.

But they want to bring down long-term-rates as well.

So to do that they are looking at buying 30-year bonds in large quantities. This is the same mechanism that is used to expand the money supply so it will expand the money supply, as the other poster said.

It is very probably coming and it will very probably work for a while anyway.

 

if the rates on the longer term bonds eased, i could see people moving their money....especially to shorter term money markets....if the cuts were comprable, which i am not so sure about...in any event, with the paradoxical spike, lowering of long term rates, and the fairly obvious reversal of the euro, it would certainly look likely that the long term bond would crash

 

It will crash eventually but personally I would wait for a clearer turn or at least a flattening out.

The saying is "markets can stay irrational longer than you can stay solvent."

Treasury Bonds in general do not turn from a Fed-inspired path without the wish of the Fed.

Actually one might be able to play both sides (continuing smooth trend up or rapid crash) with an appropriate choice of options.

 

Told you BONEHEADS ! , the 30yr is going DOWN, you don't listen do you, LOL

 

Looks to me like we just finished the head in a nice looking head and shoulders pattern on the long bond.

I'm going to be so bold as to predict that we are going to see rates on the long bond at 7% or more by summer 2009.