I have a question for you guys who are shorting the 10 year/bonds. What signals are you seeing that the bull market in bonds is over? (BTW I know you guys are out there) I am not being a smart ass or anything like that but I trade the 10 year, and it just seems like nothing will prevent the 10 year from testing, and breaking the 4% yield. From a macro standpoint the demand for long dated treasuries does not appear to be disappearing anytime soon. I cant trade with biases like "I'm bullish or bearish", thats how I lose money. I feel as though mentally I am getting to bullish on bonds which is not good. I would like to know 1. What is influencing people to put on short positions in the long dated treasuries? 2. What will cause long dated treasuries to fall eventually? BTW, save the "bonds are too high, the Fed is raising interest rates" comment.
the bond crash will happen when foreign central banks stop supporting the US tinker toy economy and our tinker toy central bank....... personal debt is at a record and going parabolic.... I lived thru 15.8% 30 year bonds and T-bills at 13% ...it can repeat.......... btw ...hedge fund redemptions start on July 1....I might set the alarm clock to get up early that day.
For the ZN, the long term trend (months-years) was down until the higher low put in around March of this year (check out the weekly chart from mid 2003 on). So on this scale we are now consolidating or reversing, no one can know which. The market is testing the down trendline and appears to have violated it. The next important point will be 114, the previous swing high. In any case it looks like it will take some time to work sideways before we see any sort of big move either way. Shorting the piss out of it now, on the long term, on fundamentals, is a crapshoot. The market has tested 110 three times since 2003 and come back up quickly each time, again the last time in March making a higher low.
Technically speaking it's clear that the market has lost confidence in bonds ability to rally much further from here. I'm looking for a retest of at least 50% of it's last rally. No matter what Pimco says btw, I trade the 30 yr.
I would imagne that the Fed's announcement of the posibility of reissuing bonds would put an end to alot of the buying. Also, As I understand it there was a large duration trader buying a ton of bonds last Dec. If that's the case He will need to unwind the position before the market is flooded with new bond issues. Of course he would do this as gradually as possible.
all the pseudo sophisticates that like to tell eveyone that they have hedge fund "money" are likely telling their managers to bail which usually requires 30 - 45 days before the end of the quarter depending on the fund... there's little else to explain why short bond, short dollar - long gold, long oil trades are getting reversed.... what else does the dollar have going for it other than busted hedge shorts.... so on July 1, the smoke clears for at least 5 minutes..... an opinion of course.............
i like looking at the sentiment. all i read is why should bonds go higher/yield lower. plus 4% is a great support level,which is what works for me.