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30 Year US Treasuries


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#1 SilentOne

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Posted 09 June 2009 - 10:41 AM

I know that everyone, including Bill Gross, looks at US Treasuries with one eye. There's lots of supply coming this month. Yields have spiked across the yield curve and basically no one wants to touch this market. Understandable. Fundamentals look like cr*p. But the cycles should be coming into favour for bonds shortly. There is a very noticeable 12-13 month cycle at work, and a larger 25 month cycle that seems to be very reliable. The bigger questions lies in what are the larger cycles doing for treasury bonds. My take is the last 9 year cycle low bottomed in early 2000 as the stock markets were peaking at the time. Then we either saw a 4.5 and 9 year low (came early) as the markets peaked last year (actual low was June 2007), or we are approaching that low in the future. Given the extremely bullish rise last year, one would have to wager that the 9 year low came early (ie. in June 2007) and is what propelled treasuries to new all-time highs in Dec. 2008. USB_M_Long_Term_Astro_Cycle.png If bonds are in fact in a new 9 year cycle (from June 2007), can they rise significantly from the next 25 month low (4.5 year mid-cycle)? My wager is yes and that is why I have taken an initial position in TLT here below 91. I expect bonds to form a low here in June and then either correct the strong rise of last year or attack the highs in a continued deflationary scenario. TLT_12___13_month_cycles.png Two clues as to which way this goes is the ability of TLT to hold onto the June 2007 lows. If it doesn't, then a 9 year low hasn't likely arrived. The second is to see the June 2008 lows hold as well. TLT is caught in a little triangle which I view as a ending diagonal in EW terms. If it breaks up from it, it could very likely end the decline. If it breaks down, then lower targets come into play. TLT_ABC.png cheers, john

Edited by SilentOne, 09 June 2009 - 10:46 AM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#2 SilentOne

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Posted 09 June 2009 - 10:54 AM

As usual, I did not have time to edit my remarks. I did want to say: If bonds are in fact in a new 9 year cycle (from June 2007), can they rise significantly from the next 25 month low (4.5 year mid-cycle)? My wager is this is likely and that is why I have taken an initial position in TLT here below 91. I expect bonds to form a low here in June and then either correct the strong rise of last year or attack the highs in a continued deflationary scenario. For now, I don't know where the 25 month cycle low should be taken from. The chart below looks better than if I take the 25 month low from June 2008. But it could equally work from the June 2007 low. We will know in the fullness of time. ;) TLT_12___13_month_cycles.png P.S. Also the long term chart is borowed from astrocycle research. I could not find a better long term chart of the 30 year UST

Edited by SilentOne, 09 June 2009 - 10:59 AM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#3 SilentOne

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Posted 09 June 2009 - 11:45 AM

TLT_25_month_cycles.png This is the view I favor most. But you can see the issue of where to place the 25 month or 4-4.5 year and its 25 month mid-cycle. It is last year's strong rise that supports this view. No way to get this thrust other than out of a new 9 year cycle IMO. cheers, john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#4 SilentOne

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Posted 14 June 2009 - 09:55 PM

Where are the bond bulls at TT? I've been adding in the last week and will add some more if we get a confirmed reversal.

Here's Glen Neely's latest:

T Notes June 8 2009

The 10 year contract hit 112.225 negating the buy call. But I see the potential just the same.

Neely_Tnotes_June_8_2009.png

Long

IEF_12___13_month_cycles.png

TLT_12___13_month_cycles_June_12_2009.png

cheers,

john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#5 SilentOne

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Posted 09 July 2009 - 09:08 AM

I've sold 1/2 the TLT position @ 96.40 (near yesterday's close). I'll hold the remainder with a stop at 90. Bonds should rally into the fall and I may add to the position again on a pullback. cheers, john

Edited by SilentOne, 09 July 2009 - 09:10 AM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#6 SilentOne

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Posted 13 July 2009 - 12:45 PM

I've sold 1/2 the IEF position @ 92.07. I'll hold the remainder with a mental stop at 88. Shifting funds to USL, DBA etc. or from USD holdings to CAD. cheers, john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#7 dougie

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Posted 13 July 2009 - 11:19 PM

How can is ee your posts John with a normal monitor? Faber today called the end of the bull in treasuries

#8 SilentOne

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Posted 20 July 2009 - 12:02 AM

hi dougie,

How can is ee your posts John with a normal monitor?

Faber today called the end of the bull in treasuries


I don't know the answer to your computer question dougie. Maybe someone can PM you with the answer. I have a 21 inch screen and the charts show well.

As for Faber, I don't watch CNBC ...

I added back the 1/2 position in TLT at 91.70 late Friday.

cheers,

john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#9 SilentOne

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Posted 18 August 2009 - 12:06 PM

I added a third segment to the TLT position in the last week of July (below 91). I sold the entire position yesterday near 94.50. I also sold the IEF position. Still hold some Canadian bonds via XGB.TO. Conservative money here in bonds, not for trading really. But in and out several times will beat returns on GICs and many fixed income investments. Bonds will have to make a decision (bullish or bearish) very soon. I will look for another chance to pick up TLT in Sept. and after that bonds better rally or we have to start considering the bearish scenarios. TLT_52___54_week_cycles_Aug_2009.png cheers, john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#10 SilentOne

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Posted 09 October 2009 - 12:02 PM

I don't have time to post a chart right now, but the 30YR UST is approaching a 20 week Hurst cycle low. I'm a buyer of TLT today close to 95 and will add next week. cheers, john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain