Despite weeker than expected new home sales and consumer confidence numbers today, treasury went down again. This is the biggest slump since July, caused by Fed members confirming a rate hike. So from now till the next fed meeting, is the treasury just going to trade in a small range or droping? Or has it gone below a "fair value" and there will be some buying later? If there is such a "fair value" how do I estimate it? Any experts out there who can help me out? Pabst? Thanks a lot. 'Preciate it.
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Where is the treasury going from now till the next fed meeting?
- Thread starter mgzheng
- Start date
Quote from mgzheng:
Despite weeker than expected new home sales and consumer confidence numbers today, treasury went down again. This is the biggest slump since July, caused by Fed members confirming a rate hike. So from now till the next fed meeting, is the treasury just going to trade in a small range or droping? Or has it gone below a "fair value" and there will be some buying later? If there is such a "fair value" how do I estimate it? Any experts out there who can help me out? Pabst? Thanks a lot. 'Preciate it.
A simple mean reversion model would have made you a lotta money these past couple years. There have been many o many false breakouts of the longer end, and all in all it's doing what has happened in the past, stayed relatively the same.
However, most would argue that the curve can't continue to stay flat indefinitely, and we may finally see the 10 year yield push up, howeever saying that fed hikes alone will push the yield higher is premature in my opinion, since they have already hiked 11 times to no avail. No, what will really make things nasty (and exciting) is if inflation AND recession hit, not only will the market respond but so will the fed (and this time it won't have a choice whether to raise rates or not).
Quote from mgzheng:
Thanks for your input. How can I find out a little more about this "mean reversion model"?
Just a generic term meaning although things get outta wack, like a spike up, the move is usually temporary and will go back to the "average" previous prices.
http://www.investopedia.com/terms/m/meanreversion.asp
Quote from Ebo:
Lemme understand this, you just slam on 100-200 contracts and are asking these questions! Good for you.
I have no clue myself, I just use a few fancy indicators and occasionly have a very large drawdown that usually goes away.
I bought the dip this morning.
Ya i know huh? I'm thinking of dabling in these myself, but knowing I'm a beginner means I"m gonna start with ONE contract, not a hundred!! Well, some people have deep pockets and a thick stomach, i'm certainly not one of em