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Treasury

Grab some treasury on a full bus of bears! Despite the bond bubble right now, I believe there's some room for another rally in bonds. The election of trump have seen stocks driven to record highs, and bonds/treasury/gold crushed. The longest stretch of inflows into US equities since 2014 when the dollar rallied 20%. Net short in 10 year bonds are currently at record lows: (-500,000) i.imgur.com (courtesy of zerohedge) A large covering of shorts could drive bonds much higher in the coming days into Q4 earnings season. I believe a buy at this level is a pretty reasonable risk reward on the backs of the majority in the market... (4% stops, 20% tgt)
NASDAQ:TLTLong
by LastBattle
Short Term Short TLTStill think rates will head lower due for a myriad of reasons, but in the short term, it is plausible that rates will go higher for technical reasons. Longer-Term Reasons for lower rates (i.e. lower for longer)- 1) Monetary Policy remains accommodative 2) Growth/Inflation expectations remain subdued 3) Foreign buying interest from places with negative yields on rates (see japan, europe) Near term reasons for the long bond to go up in yield- 1) Hawkish Fed Talk 2) Technicals as seen in the diagram (e.g. long term toppyness, decelerating RSI, declerating CCI, potential MACD bearish cross-over)
NASDAQ:TLTShort
by dsorchestra90
MACRO VIEW: TNX IS ON VERGE OF BREAKDOWN WITH OILThe 10-Year Treasury Note Yield is on the verge of breakdown due to the recent downtrend in oil and consequent lowered inflation expectations. Despite the anticipated FED rate hike, the Yield can actually go in opposite direction (the famous puzzle outlined by Greenspan, the former FED chairman) The breakdown in the Yield will be confirmed on quarterly basis, if it trades below 2.17%, which is the lower 1st standard deviation from quarterly (66-day) mean.
TShort
by Killy_Mel
1
DATA VIEW (NOT A FORECAST): US REAL DEBT DOUBLED SINCE 2009US debt to foreign investors has doubled in volume since the start of 2009 (which was the height of the financial crisis). This indicates that despite the fact that the crisis occurred and was initiated in the US, the demand for their debt not only did not vanish - it actually spiked. In mu humble opinion, it is a very strong indicator of the actual strength of US economy. /// Please note, that the level of debt that US actually owns to the rest of the world is much lower than 100% of GDP. Actually, as long as the debt COST is affordable (and it is affordable now) - debt is not much of a problem. /// For more detailed info (very interesting stuff), please see: www.treasury.gov
FLong
by Killy_Mel
10-Yr Treasury Note, Follows Major Market MovementsSomething I noticed today while look at the 10-yr bond in general (reflecting loan rates). If you didn't already know, the price of the 10-yr bond directly affect any and all loan rates available. Mostly of course affecting housing loans. That's another point aside, but it does look like the price of a mortgage will be expensive over the summer. Anyway, what I also uncovered while looking at this is how well the peaks in the 10-yr bond correlate to the major market changes for the US. Take a look at this Wiki link for time frame references - en.wikipedia.org Most every major direction change (and peak) is associated with a market event since the 1980s to today. I have highlighted those peaks on both price and RSI with vertical lines and bubbles respectively. It's also worth noting that the burst before the 2008-2009 housing bubble crash was preceded by a rising wedge...which finished out its pattern as you would have expected. (spoiler: rising wedges end in price trend correction - downward price movement). Looking forward to the end of 2013 and the beginning of 2014, we have another peak. This one is not very close to the price trend line BUT shows an obvious peak in the RSI chart. Judging from previous events like this, I assume the market will not react graciously? Do I know? Of course not. It's just a guess. More important than that is the new pattern being formed (Symmetrical Triangle) from the 2011 to 2016-17 time frame. This could be a continuation pattern OR a reversal pattern (sym triangle vs. pennant). Can't be sure until we see the pattern finish itself out to the end, however, I can take a pretty strong guess at what lending rates will look like for the next 2-3 years. Lending rate guess: 2015 (Summer): rates will peak by September then start to fall 2016 (Spring): rates will fall to its low (on the trend line) then start to rise (March-ish) 2016 (Summer): rates will peak by June/July 2016 (Fall): ??? For rates past Fall 2016 I'm not sure what may happen. I do not have a viewpoint past that time frame other than to "wait and see". My guess is that this pattern is going to be a reversal but it still has a long way to go to break through the long term price trend line.
T
by cmharkey
2
31 Year US Bearish Bond Yields Coming to an EndThere are many reasons why bond yields should go down, however, there are many more positive reasons why bond yields will go higher. Demographically Challenged Our largest demographic population on the planet, not just in the US, is the baby boomers born 1944 to 1964. Largely early baby boomers born during WWII and up to the late 1940's have already started collecting on retirements. For these seniors to live comfortably in retirement they will need to draw down on a steady income derived from higher US Bonds yields. Boomers can no longer afford to risk money in equity markets, they will be forced to invest conservative in fixed incomes. US Political Movement For more than 30 years the US has run up debts with both political parties at fault. However, more recently we are seeing a shift towards a popular following of younger fiscal conservatives in the Republican party. Many of these fiscal conservatives candidates govern states and have taken on the challenge of run away debt spending. Fiscal Conservatism will also appeal to the US largest voting class, baby boomers. Baby boomers are fully aware that more debts equals more instability in the US, and want to see a more fiscal responsible governments. To appease the baby boomers wishes, whoever it is that leads the US, they will implement a strategy of spending cuts and debt reductions. Spending cuts and debt reductions will also help US Treasury Yields increase. Federal Reserve Raising Rates Our own Federal Reserve has been sounding off the warning now for almost a year, it's only a matter of time before Janet Yellen starts raising benchmark rates. Although US economy has entered another soft patch, which will require the Fed to talk down the rate increase in 2015. However, sometime in 2016 we will see our first rate increase in the US. I expect other countries like Great Britain to follow this trend of rate increases.
TLong
by QuantitativeExhaustion
30