Bond Futures

[Point Man]

Quote from spreadem:

Okay the above statement was made early in the day. I still feel that this rally will stop short of contract highs and create a double top or a head and shoulders topping pattern.

Sell strength and buy weakness for 3 months of correction/consolidation phases before the next leg up starting in the fall

 

[Point Man]

Quote from spreadem:

Okay I'm calling my shot.

It looks like the head of a head and shoulders pattern has formed in Sept Bonds. The left shoulder and the head has formed. The neckline would be the 118 area.

So I'm looking for a bounce up from this 118 area and then the right shoulder will be formed for the larger scale selloff in the Sept Bonds contract.

Any comments?

the right shoulder should better be on low volume and a decline in open interest or you are wrong. As advised in my commentary, I would be a scaled down buyer from the 11705-11616 levels in the Sept bond

 

[Point Man]

Quote from nitro:


What material and where?

nitro

Did you find the material? Do not fade me. I am on a roll.

 

[spreadem]

Bonds have dropped from 123 to 118, or 5 points. A 50% retracement would represent a rise of 2.5 points to 120'16. I'll start to look for weekness in the 120 to 120'16 area before I take a short position.

Where are the bond bears ?

 

[malcom x]

lets see all the talkers get short tomorrow at 120. bit of a rally the last two days. if your not long you are wrong.

 

[zboy2854A]

It's hard to be bearish on bonds at the moment, because things are so out of whack. We have an inverted yield curve, we have bonds making a huge runup concurrently with stocks, when traditionally they perform inversely, and we have the Fed continuing to cut rates. Now here's the question. At what point do bonds go back to moving inversely to stocks? We know that the equity markets are in another bubble and are due for a substantial decline, so do bonds continue to move in tandem with stocks back down, or do they resume their role as haven for stock sellers and continue moving up?

At some point, yes bonds will come down, but I wouldn't bet on it just yet. IMO short term, we could see a retracement back to the 110-109 level, but I agree with Point Man that there could still be considerable upside movement left for bonds, especially if our economy continues to go the way of Japan.

Chartwise, we need to see a decisive break below 118 to confirm a retracement. Otherwise, we could be just looking at a pause in bonds' continuing stair-step higher. If there's a break below 118, I'd look to go short on a short term basis with a break even stop and a target area at 112. However, if it can't break below 118, I'd wait for a break above the high and go long.

 

[trader99]

Quote from zboy2854A:

We have an inverted yield curve, we have bonds making a huge runup concurrently with stocks, when traditionally they perform inversely, and we have the Fed continuing to cut rates.

Yield curve is SO NOT inverted now. It's normal and upward sloping. We haven't had an inverted yield curve in well over decade or more. We might had a little hump here and there, but definitely not inverted.

also, what you are talking about stocks and bonds running up together has nothing to do with curve inversion. that's a different phenomenon.

do you even trade bond futures?

just curious...

 

[spreadem]

quote from malcolmx :

lets see all the talkers get short tomorrow at 120. bit of a rally the last two days. if your not long you are wrong.

I have been long ... I stayed long for some time, and recently I took profits.

I don't know how closely you paid attention to the most recent selloff last week(from 123 to 118). But the price and volume action gave me the impression that there was a change in trend coming.

 

[nitro]

Quote from zboy2854A:

... We have an inverted yield curve...

nitro

 

[Point Man]

Quote from zboy2854A:

It's hard to be bearish on bonds at the moment, because things are so out of whack. We have an inverted yield curve, we have bonds making a huge runup concurrently with stocks, when traditionally they perform inversely, and we have the Fed continuing to cut rates. Now here's the question. At what point do bonds go back to moving inversely to stocks? We know that the equity markets are in another bubble and are due for a substantial decline, so do bonds continue to move in tandem with stocks back down, or do they resume their role as haven for stock sellers and continue moving up?



From Point Man

Sorry old boy, but traditionally, bonds and stocks move in line with each other. The phrase 'Flight to Quality' came into play after the Crash of 1987. After which stocks and bonds moved in line again with each other. It has only been the past 3 years that bonds and stocks have moved in the inverse and that has not been the case the last 3-4 months.