Bond rally nearing an end?

[Il Principe]

Also said "a finance-based US can't endure a flat curve for too long", so it all looks like a not-so-subtle hint to kickstart their steepeners.

 

[steveosborne]

Quote from johnpinochet:

mcurto,

What is your take on activity today? The strengthening and break past 107 15 forces me to consider that my short is premature. Any comments on the positioning prior to the 0730 reports tomorrow?

I share the same concerns. While the build up of inflation risk premium is telling me that today was a good time to get in, price action is telling me that I'll have to go through a period of pain first before seeing bonds go down.

 

[Optionpro007]

Steve: just send you a PM with the answer.


Lance: I wasn't being sarcastic. Can you tell us how you picked 110 as your target?

Quote from steveosborne:

moumkin.

How did you get the right letters to show? When I try, I see different letters than the ones I typed. What's the trick?

 

[mcurto]

I think this geopolitical stuff is definitely screwing with the yield curve. Too bad it is all CNBC focuses on all fricking day and the stock market seems to think it is important as well. I think this will blow over in a few weeks, but it is trumping market fundamentals as we speak. In any case, I think short the 2yr is a pretty good trade based on the fact this is now the third time or so it has traded -12 basis points under the Fed Funds rate during this cycle and every time previously it managed to bounce back toward zero. Thus, if you are in the camp that retail sales may be strong and think the consumer is still very tough (and don't forget inflation and Humphrey Hawkins next week) I would get short the 2yr outright before the number with a very tight stop. Highly risk play but maybe the market will start watching something besides the Middle East, if not, then play a steepening with the continued flight-to-quality.

 

[daddyeaux]

me wants to short the 30 y or at least buy puts outright.....

there's a lot of air above the line

 

[landboy]

Quote from daddyeaux:

me wants to short the 30 y or at least buy puts outright.....

there's a lot of air above the line

Yup, or of course it could be another bounce off the trendline, either way, it'll take at least a few months to play out, that's a25 year chart ya got there

 

[Lance Carson]

The stops are below 107-04 ( ZBU6), take the money and run.

 

[Lance Carson]

Chichi, get the LLello...

 

[steveosborne]

Do you use volume histograms to figure out where stops are?

 

[Lance Carson]

inside tip, no volume