Ya, it'd be hard to stop a moving truck if it gets there... On the other hand, if the fed signals another rate hike we're 75 basis points negative and CPI inches higher, the fundamentals start kicking in...
As if PIMCO hasn't sold enough strangles they added another 20,000 to the total today at 17 ticks. Really the only traders doing anything meaningful today, light volume pop early, then nothing rest of the day besides that strangle around Noon. Wouldn't read too much into today's action.
It's as if Bill Gross was told that one cannot buy, only sell premium. Proif that the guy isn't comfortable with his trading. How many FI managers pull a Leeson every month. Ridiculous.
Meanwhile, this from Marc Faber's June 5 note: "My readers will know from previous reports that I am ultra bearish about US bonds for the long term. In fact, I recommend that each reader buy just one 30-Year US government bond, frame it and put it on his wall in his living room. You can then, in future, show your grandchildren how the US dollar and bonds became worthless. However, for the short term, I believe that the out-performance of equities compared to bonds, since 2003, has ended and that bonds will now rebound over the next three months (see figure 5). I may add that bond bullish sentiment reach recently extremely low levels while commercial had record long bond positions â a powerful contrary indictor, which would support my take that the US economy will shortly badly disappoint." http://www.gloomboomdoom.com/marketcoms/mcdownloads/060605.pdf *Note his May letter was spot on re: commodity and equity sell-off, accompanied by a rally in bonds/notes.
faber spot-on u must be joking... he is weeks behind the curve (months actually, but no $-bear will ever want to even consider the possibility...), so ultra-bearish he is probably on prozac now having to accept the realities of rates going up and how money's moving away from his babies... http://www.elitetrader.com/vb/showthread.php?s=&threadid=70454 what a joke!
I stand by my statement "*Note his May letter was spot on re: commodity and equity sell-off, accompanied by a rally in bonds/notes." I would respond to your USD comment but it is off topic - see the thread title.
BlueHoreshoe, For the 2/5/30 yr fly you are essentially looking at it as two separate yield curve trades. The 2/5 or TUF spread weighting is normally 100:90 and the 5/30 or FOB spread weighting is almost always 250:100. Thus, if you are looking to do this spread the optimum ratio would be 100:340:100 or at its smallest unit 5:17:5. The futures spread is kind of a proxy for a cash belly vs. wings play.