I would feel a lot more comfortable with my position had I gotten in on friday, not a week back, it's just such a waste of time-value, I coulda been short some more oil... Now we need to retest highs past 113, so ya, kinda pissy... Just came back from skiing, seems like winter's back with a vengence!!
It might ... but all the other terms are rising If the 30yr rallies to 114 I'm out. But it did make new lows last week before rallying, so the trend is still down.
Once the steepening trend kicks in it should last 18-30 months. To try and pick the turning point would be stoopid. Esp. w/ a new Fed that still needs to establish some cred. I've put a 2-10 steepener trade on in an IB papertrade account ('cause FI spreads are a new animal for me) and the paper acct is good help remaining patient, and learn how it moves. The economy is going to begin rolling over at the same time the steepen trade kicks in. You watch. Once the steeper trade kicks in, everyone will be shittin' their pants trying to short the 'next' equities rally. Minting it on the monster wave requires patience for the set-up. This deserves a journal of its own ....
The yield curve will steepen. We've just recently inverted, and have been on a flattening/inverting trend for ... about two years? It is about to reverse likely within the next 6-18 months. Historically the reverse trend lasts ~2+ years.
Agree with you. I find it a lot easier to predict the short end than the long end however. I'm playing this one from the short end right now with floating rate instruments. Once the rate hikes slow, I'll go long short & ultrashort bonds and start to think about shorting the long bond again. I agree that the steepener will happen (not for a little while though - 6 months is my guess but that's as good as anyone elses) but not sure that much of the movement will be on the long end. However, if it goes... look out!
Go to the CBOT website and do some reading on the TUT (2yr-10yr) spread. It allows you to trade the change in shape of the yield curve ....