Bond rally nearing an end?

Not sure about that yet, there were so many new put positions established today in the 10yr and 30yr they are too numerous to mention. The one play above all that stood out today was the June 102-103-104-105 Put condor, paper paid 10 ticks on 20,000 lots. This is a brand spanking new position and a very bearish one at that. It is a huge account that is pretty inactive, but when they put on a play in the options they are usually right on the money. I think we have somewhat of a trend going, that term hasn't been tossed around in years in the bond market (since the big bull move in 2003). Lets hope it stays intact.
 
I'm hoping i'm right about the steepning trend, I should be going further out, woulda made much more had I shorted the 30 instead of the 10, but waiting for a pullback before i get in again...

30 is above 5%, FINALLY!!
 
It does look like treasuries could be in a downside break-out. When SPX is down a percent (while not a 3 sigma move, it does seem strong by recent standards), I find it unusual that VIX barely budges, Red_1 ED breaks to new low, and the bond is down a point.

Maybe a collapse in commodities will bring back a bid to bonds, but it may take a while for copper and gold to top out.
 
Quote from JohnL111:

It does look like treasuries could be in a downside break-out. When SPX is down a percent (while not a 3 sigma move, it does seem strong by recent standards), I find it unusual that VIX barely budges, Red_1 ED breaks to new low, and the bond is down a point.

Maybe a collapse in commodities will bring back a bid to bonds, but it may take a while for copper and gold to top out.
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Still holding a bit of gold... although i'm starting to "regret" it since I coulda spent the money taking my pennies and melting them into nickles :D
 
Quote from mcurto:

Not sure about that yet, there were so many new put positions established today in the 10yr and 30yr they are too numerous to mention. The one play above all that stood out today was the June 102-103-104-105 Put condor, paper paid 10 ticks on 20,000 lots. This is a brand spanking new position and a very bearish one at that. It is a huge account that is pretty inactive, but when they put on a play in the options they are usually right on the money. I think we have somewhat of a trend going, that term hasn't been tossed around in years in the bond market (since the big bull move in 2003). Lets hope it stays intact.
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Been out of the option game for a while, but im assuming vol had got a decent bid once the 10 yr broke the 106 handle. Was pimpco still selling option premium on the downside?

In the put condor seems more like a vol play to me than a direction play. If the 10 yr comes down to the 105 handle i would think that they would be getting paid nicely from the gamma of the position. The 102 handle of the condor seems pretty insignificant. Probably were putting on a put spread and had to buy the 102 puts for "risk" reasons. They proabably think if we eventually get to 105 handle vol will be nicely bid and there will be some sort of consolidation or rally from there. Like I said ive been away from options for a while but just thinking.

Would that 5.5% yield be around 105'00?

How was pimpco dealing with their strangle today?
 
Quote from Urkel:

Been out of the option game for a while, but im assuming vol had got a decent bid once the 10 yr broke the 106 handle. Was pimpco still selling option premium on the downside?

In the put condor seems more like a vol play to me than a direction play. If the 10 yr comes down to the 105 handle i would think that they would be getting paid nicely from the gamma of the position. The 102 handle of the condor seems pretty insignificant. Probably were putting on a put spread and had to buy the 102 puts for "risk" reasons. They proabably think if we eventually get to 105 handle vol will be nicely bid and there will be some sort of consolidation or rally from there. Like I said ive been away from options for a while but just thinking.

Would that 5.5% yield be around 105'00?

How was pimpco dealing with their strangle today?
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Paper was buying the natural condor, so they don't want a rise in vol; it's short vol and gamma at neutrality.
 
Quote from mcurto:

Not sure about that yet, there were so many new put positions established today in the 10yr and 30yr they are too numerous to mention. The one play above all that stood out today was the June 102-103-104-105 Put condor, paper paid 10 ticks on 20,000 lots. This is a brand spanking new position and a very bearish one at that. It is a huge account that is pretty inactive, but when they put on a play in the options they are usually right on the money. I think we have somewhat of a trend going, that term hasn't been tossed around in years in the bond market (since the big bull move in 2003). Lets hope it stays intact.
More...

Mcurto

Just took a good look at the charts. Todays' action extended the third wave down. You have your trend! The bull market in rates is in a third wave thrust...
 
What I'm seeing in the Bond market in EW terms.

The selling on friday extended the downtrend into a subdividing five wave decline. The 30yr experienced the thrust of the selling in a third of a third wave. I do not see any appreciable support until about 105 in the 30yr, and about 104 in the 10yr. We're a bit oversold and due for a weak bounce. The bull market in yields continues!

For all the charts visit:
http://spaces.msn.com/caldaroew/

and hit the chart link on the right.
 

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