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Bond rally nearing an end?
- Thread starter gharghur2
- Start date
If it weren't for the falling dollar, I would jump in at the end of the day but I will wait for the first catalyst of a dollar rebound. The dollar is searching for a bottom like gharghur2 says, and I think that any of the following events that could happen this week would create the bottom everybody is waiting for:
- Wednesday. Comments at the end of the FOMC meeting revealing that rates have more chances to go up again in June than what the foreign exchange market is now expecting; or
- Thursday. Successful auctions revealing that US treasury yields are generous enough to attract foreign capital again.
Quote from landboy:
Gonna try to hold myself back from doing anything before the fed statement, like trying to tell a chain smoker to quit for a couple days...
I know that I shouldn't do this, but I use days like this to set myself up for the upcoming events, establish a position, and then put in a stop (and maybe even a take-profit, but I hate to put those in except when they are trailing profitable stops).
Much smarter to do what you are doing.
But I have never said that I was very smart, anyway.
Quote from steveosborne:
If it weren't for the falling dollar, I would jump in at the end of the day but I will wait for the first catalyst of a dollar rebound. The dollar is searching for a bottom like gharghur2 says, and I think that any of the following events that could happen this week would create the bottom everybody is waiting for:
- Wednesday. Comments at the end of the FOMC meeting revealing that rates have more chances to go up again in June than what the foreign exchange market is now expecting; or
- Thursday. Successful auctions revealing that US treasury yields are generous enough to attract foreign capital again.
1. IMHO we are trying to 'talk down' the dollar to hurt the chinese and force them to capitulate by revaluing their yuan which will slow the hemorrhaging of our current account balances.
However, there is a want to continue raising short term rates by the fed to control the housing bubble and get long term yields up (to solve the 'conundrum').
As long as this is reasonably orderly, everything is fine and dandy, particularly if the equity markets are supported.
Remember that BSB suggested that pauses could occur... how high would one of those send our equity markets?
2. I think the auction is going to be poor unless the japanese and europeans step in to buy size. I don't think so, but I am not an authority on such things and have poor predictive value, so make your own decision.
For the first time since late January, I'm getting conflicting signals from my price models. I have data indicating that Friday's employment report triggered a move away from 1310 toward a new equilibrium somewhere higher than where prices are right now; while another program is telling me that the stock market has topped.