Bearish on the 10-Year Treasury Note (TNX)

Discussion in 'Trading' started by YIELDSAFE, Mar 6, 2007.

  1. I believe the yield on the 10-Year Treasury Note (TNX) will rise to 4.65% or more within the next 8 weeks.

    My system is indicating extremes in bullish sentiment and overbought conditions in the 10-Year Treasury Note as a result of flight to safety buying. I believe this will unwind and cause bond prices to fall and yields to rise.

    As of 3/6/07, I have taken a short position in TLT at a price of 90.06.

    Position: Short TLT
    Entry: 90.06 (3/6/07)
    Exit: Pending system signal
    Stoploss: 100
    Time Stop: 8 weeks
     
  2. From fundamental point of view i expect yield to rise into the year. Technically also it looks like we are at bottom of channel and prior support that has held before. With the housing issues etc. and if problems in Asia/China continue and Asians start selling their US assets, then rates will definitely start to creep up. Question is, does US still remain best place to place money (treasury)? Still looks that way so far especially when emerging markets drop and rise so violently (much more than US). just some thoughts http://lauristonletter.blogspot.com/
     
  3. As I stated above on 3/6/07, the yield on the 10-Year Treasury Note (TNX) would rise to 4.65% or more within the next 8 weeks.

    My forecast was right on target. The 10-Year Treasury Note (TNX) closed at 4.65% on 3/30/07, reaching a high of 4.67%.

    www.yieldsafe.com

    Update of Short TLT Position:

    Short Entry: 90.06 (3/6/07)
    Current Price: 88.28 (3/30/07)
    Profit: 2.02%

    Exit: Pending system signal
     
  4. Nice trade. Do you anticipate your system keeping you short? Would you mind discussing the "sentiment indicators" that you track?
     
  5. You were willing to risk nearly $10/share in order to make nearly $1.5/share? Okay.
     
  6. As of the close on 3/30/07, the system was still short on Treasuries. In terms of a time frame, the maximum holding period is 8 weeks from the date of entry on 3/6/07. This would be considered a time stop of 8 weeks.

    The time frame of this trade could be shorter in duration if one of the two exits is activated: system exit for profit or stoploss.

    My system indicators are proprietary. I will say that they are contrarian in nature and benefit from the reversion to the mean.
    I have applied the same principles to other markets as shown below.

    Crude Oil
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=84958

    S&P 500
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=88859

    www.yieldsafe.com
     
  7. bond boys just keeping it range bound with option selling at the periphery to make extra bank.

    another oil shock is in the works, stops being run on bond bullls to clear them out before another bullish attempt at 4.4%
     
  8. Wow!! No wonder your stuff is proprietary. Looks fantastic.

    Here's the irony. I started a thread on how puretick is bullshitting gullible newbies. On the other hand you're making real time calls that are simply fabulous.

    Thank's for the posts!


     
  9. Surdo

    Surdo

    Great TLT call indeed!

    My crystal ball is also starting to signal an intermediate term bottom, $88ish.

    el surdo
     
  10. As I stated above on 3/6/07, the yield on the 10-Year Treasury Note (TNX) would rise to 4.65% or more within 8 weeks. On 3/6/07, the yield of the 10-Year Treasury Note was hovering around 4.5%.

    One month after my call on 3/6/07, the yield of the 10-Year Treasury Note reached its highest level in 7 weeks, closing at a yield of 4.75% on 4/6/07. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aBxxLiL1ZKiM

    Since my forecast of higher yields on 3/6/07, the yield of the 10-Year Treasury Note has risen nearly 25 basis points in one month.

    Update on Position: Short TLT

    Entry: 90.06 (3/6/07)
    Current Price: 87.17 (4/9/07)
    Profit: 3.32%
    www.yieldsafe.com
     
    #10     Apr 9, 2007