I'm new to this thread. But the time has come... Time to short the US bond market, BIG TIME!! I've traded JGBs since 1997 so I'm somewhat of an old hat when it comes to trading bond markets under a QE environment. My experience trading Japan all these years is that you're in bull market mode for 80%-90% of the time. Grinding higher most days, dips short lived, providing buying opportunities on the most part, whilst the majority fade the trend based on fundamentals, historic low yields, etc. And the shorts get squeezed, rinse repeat...for the bulls its like taking candy off a baby... And then finally the market turns. Most bears have given up. Price action behaves differently. It takes a couple of weeks to turn but before long it develops into a bloodbath for the longs. Just as the bears were stubborn for months on end fading the historic low rates, now it is the time of the bulls to dig their heals in, averaging in based on QE, carry considerations, deflation etc. In late 1998, 10 year JGBs yields went from around 60bp to 2% in the space of a month. Big figures were literally being lopped off the future on a daily basis, it was brutal. And then bull market resumed... Again in July 2003, all seemed calm, then suddenly VAR concerns jolted the 10 year yield from 43bp to 2% again in the space of a few weeks. Those new to a QE environment have not yet seen this happen in the UST or Bund market. Complacent bulls are waiting for a rate hike or some hawkish comments from Bernanke to act as an exit catalyst, but frankly you don't need it, when the market decided to turn it will. Fundamentals will seem irrelevant. To me the price action these past couple of weeks looks distinctly bearish and if the US follows a similar course to JGB selloffs you will see 10 year UST yields north of 4% before the year is out. You'll get the occasional short, sharp rallies like today to sucker in some longs, but these will prove short lived sell opportunities. Of course, I could be completely off radar here, it wouldn't be the first time I've been wrong, and as a disclaimer. I am talking my book having loaded up on bond put options. Time will tell.
"zb post auction chop is brutal a 4-5 tick winner is gone in a second unreal size choppers" I didn't trade today but isn't just amazing how it can take 20-30 minutes to find any edge and they wipe it out in a split second? Story of the last 2 years
The bearish chatter from the media is overwhelming. If cnbc are talking about a bond bubble then most likely it's safe to go long. I am a bull lacking conviction at the moment, but I think even if we do sell off there will be a few twists in the tale like a serious spike higher first. That said, a daily settle below 12905 activates the double top which takes us 6 points lower...
Is tbt the best instrument for short the us treasury? Looking to load up a position in my 401k, they dont let you trade any derivatives.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2994281#post2994281 this trade has played out to a 'T' closing it and taking Profits.126 035 blackguard