I'm just curious about what you're saying here so that I understand. You were thinking that after a run up, that bonds would fall for up to 6 weeks? Wouldn't you still then feel that you could sell and still have more of a breakdown? Please clarify.
In terms of 10Y vs. Bund spread the big cash levels from one of the dealer commentaries late last week were 95 basis points and 115 basis points (TY over). Late last week their outlook was for wider spreads and I would imagine they haven't changed their opinion that 115 basis points will be tested at least in the near-term. Be careful though sometimes the levels that dealers give in their commentaries are areas they use to offset their current position so those may not hold. I think the bund may be closer to enormous stops though than Treasuries are so would maybe hold off getting short the spread (short tens vs. long bund), but even at these levels probably still a good trade.
That "crazy talk" you're referring to has officially started. http://www.marketwatch.com/News/Sto...D59-4E72-B4F4-8BA4FB5AE909}&siteid=mktw&dist=
I'm a swing/position trader who likes to ride 4-8 week waves (often until option expiration); and for me an opportunity is when two things occur simultanously: 1. My statistical data is telling me that one side has exausted a lot of resources to bring prices where they currently are while the other side decided to step aside, waiting for the current trend to show signs of fatigue. 2. Information processed by overall markets (bonds,stocks,dollar,oil,gold) to get prices where they currently are is becoming repetitive and losing it's effect. So one more leg up (to complete the rally that started three weeks ago) would have been the kind of residual activity that would have cleared the table for a slide. Right now, the market is all tangled up and has been so for, I would say, about a week.
Longer term I do pay attention to the news. I do believe we will have at least 2 more rate hikes, maybe more. Commodity prices which had taken a dip will come roaring back and increase inflation worries. There will be some support for bonds coming from money being diverted from equities in the long haul. Bond yields will gradually rise over time.
Yes, the CRB took quite a hit. But like you said it has rallied some. It is still in danger of collapsing though, it will have to rally higher with the aide of Crude and Gold.
I was expecting bonds to go down and drag stocks and oil with them but instead The NASDAQ is still welcoming and celebrating news and comments about solid growth; Bonds are going down, as expected, but mainly because of the way the long end is incorporating additional inflation worries; Oil and gold originally behaved like children trapped in the crossfire of arguing parents (stocks up and bonds down) but eventually the strength of the stock market fueled commodities.
Hey Steve, I noticed something I hadn't seen in quite a while: Bonds making new lows for the day ... while Stocks were making new highs Think there is some major money coming out of bonds and going into stocks...like in asset allocations of funds