Bonds, reversing

Discussion in 'Financial Futures' started by arkadyka, Dec 9, 2006.

  1. arkadyka

    arkadyka

    Working off the TLT and IEF charts I am seeing a divergency between price and obv/trix. Other few interesting things to mention are extreme spikes in call activity and money flow which indicates either extreme bullish sentiment or buying power exhaustion.

    Either way, I think TLT will head towards 86.50ish and in doing so will reinforce and confirm the bearish sentiment for equities in the early part of 2007.
     
  2. Went short ZN (10-yr bond future) yesterday. Hope you are right.

    PS Don't know how long I'll be short. Could be a week, could be months.
     
  3. dhpar

    dhpar

    good luck - you entered the most rational position that behaves the most irrationally for the longest time :)
     
  4. arkadyka

    arkadyka

    considering that this current bond rally started back in june, i think going short is probably a good bet from a probability stand point. i dont trade bonds myself, but use them from an intermarket analysis stand point and really fail to see where the rational is for this market to be making new highs in 2007. with the economy slowing or contracting and bonds topping, the case for the stock market to continue it's rally is based on hope and greed rather anything logical. granted markets do thrive on those emotions alone, but not forever.
     
  5. dhpar

    dhpar

    I do trade bonds a lot - and I used the same arguments in July...
    That's why I was giving him a warning....
     
  6. Back in July I was long as bonds shot up. This time I'm short.
     
  7. dhpar

    dhpar

    good for you.
     
  8. dr_sean

    dr_sean

    Just on Friday, I bought some puts on the TLT.

    January 07 90 puts.

    I want to add some more time to my position, and something more OTM. Will scale it into the trade.
     
  9. dr_sean

    dr_sean

    ok & TLT rallied today :eek:

    Sucks but I'm holding for more downside.

    What happned to you guys today?
     
  10. dhpar

    dhpar

    fine today - not short bonds anymore - moved everything to fed funds some time ago...
     
    #10     Dec 11, 2006