Jump to content



Photo

A Fly in the Bond Bubble Ointment


  • Please log in to reply
5 replies to this topic

#1 Douglas

Douglas

    Member

  • Traders-Talk User
  • 1,217 posts

Posted 08 January 2021 - 11:59 AM

Lately rates are rising and my favorite rate correlation, $copper/$gold versus the 10 year treasury yield ($TNX), is signalling that higher is the path of least resistance.  With Juice It Janet at Treasury, Pumping Powell at the FED, Not Sure as POTUS,  and a friendly House & Senate, funny money should flow like water after the 20th.  Is this the noise that finally wakes the long hibernating bond vigilantes from their seemingly eternal slumber?  Can the FED buying keep bond bear hunting successfully if there's an ursa stampede?  Will covid keep rates in check even with a super funny money flow and vaccines in every willing arm?  Maybe this is just a dronesome fly in the bond bubble ointment that's easy to extricate with just a little more FEDing.  The next few interesting months should answer all these questions.  

 

34I3wxB.png

 

Regards,

Douglas

 



#2 da_cheif

da_cheif

    Member

  • Traders-Talk User
  • 10,261 posts

Posted 08 January 2021 - 01:13 PM

been short tbonds from 182



#3 Douglas

Douglas

    Member

  • Traders-Talk User
  • 1,217 posts

Posted 08 January 2021 - 03:09 PM

Don, where are you going to cover your short?  Are you a bond grizzly or teddy bear? If one is not too beared up, the chart below seems to say somewhere in the 155 neighborhood at the red line based on the rising expanding triangle first touch of the lower line, 4 of previous degree in the five wave Elliott impulse up, roughly a 61.8% retracement of the move from about 138 to 182, and measured using the double top blue arrows. 

 

If you're a grizzly, maybe your thinking about the lower trend line on the monthly chart below in the low 140's.  What's your ring the cash register target?

 

Qv7rBgP.png

F9SNGBd.png

 

Regards, 

Douglas



#4 slupert

slupert

    Member

  • Traders-Talk User
  • 1,686 posts

Posted 08 January 2021 - 05:45 PM

Been talking about bullish divergences forming in Uncle Buck, commodities might be in for a nice dip,

https://schrts.co/ZTcGWCjR



#5 LMF

LMF

    Member

  • Traders-Talk User
  • 678 posts

Posted 09 January 2021 - 11:04 AM

I dont trade the bond market very often, just using it as an indicator. But good entry points going higher are TLT around the 200 week MA which is at 130 now. TLT still up at 151 so further to fall. 2019 Q1 last entry point was excellent.

#6 Douglas

Douglas

    Member

  • Traders-Talk User
  • 1,217 posts

Posted 09 January 2021 - 12:35 PM

LMF, if you're a long only ETF and not a futures or shorting ETF sort of person, the TBF ETF might provide another way to play the rise in rates.  Note the -0.99 Correlation to TLT.  It looks like it's testing that top trend line.  Either a break or a reversal might be a big deal.  

 

FRx0et3.png

 

I've got to get back to doing my times and goes intos for this week's risk window calculations.  

 

Regards,

Douglas