Sell strength and buy weakness for 3 months of correction/consolidation phases before the next leg up starting in the fall
the right shoulder should better be on low volume and a decline in open interest or you are wrong. As advised in my commentary, I would be a scaled down buyer from the 11705-11616 levels in the Sept bond
Bonds have dropped from 123 to 118, or 5 points. A 50% retracement would represent a rise of 2.5 points to 120'16. I'll start to look for weekness in the 120 to 120'16 area before I take a short position. Where are the bond bears ?
lets see all the talkers get short tomorrow at 120. bit of a rally the last two days. if your not long you are wrong.
It's hard to be bearish on bonds at the moment, because things are so out of whack. We have an inverted yield curve, we have bonds making a huge runup concurrently with stocks, when traditionally they perform inversely, and we have the Fed continuing to cut rates. Now here's the question. At what point do bonds go back to moving inversely to stocks? We know that the equity markets are in another bubble and are due for a substantial decline, so do bonds continue to move in tandem with stocks back down, or do they resume their role as haven for stock sellers and continue moving up? At some point, yes bonds will come down, but I wouldn't bet on it just yet. IMO short term, we could see a retracement back to the 110-109 level, but I agree with Point Man that there could still be considerable upside movement left for bonds, especially if our economy continues to go the way of Japan. Chartwise, we need to see a decisive break below 118 to confirm a retracement. Otherwise, we could be just looking at a pause in bonds' continuing stair-step higher. If there's a break below 118, I'd look to go short on a short term basis with a break even stop and a target area at 112. However, if it can't break below 118, I'd wait for a break above the high and go long.
Yield curve is SO NOT inverted now. It's normal and upward sloping. We haven't had an inverted yield curve in well over decade or more. We might had a little hump here and there, but definitely not inverted. also, what you are talking about stocks and bonds running up together has nothing to do with curve inversion. that's a different phenomenon. do you even trade bond futures? just curious...
I have been long ... I stayed long for some time, and recently I took profits. I don't know how closely you paid attention to the most recent selloff last week(from 123 to 118). But the price and volume action gave me the impression that there was a change in trend coming.