Clearly the trend has been higher in the last four months as June 30-yr bonds futures have climbed 8 handles. This weeks consolidation just below the 135’00 level could signal an interim top. A future trader could institute shorts with stops above the recent highs. Another option would be a bearish option play with an objective of 132’00. June options expire on 5/23, the 133’00 strike currently costs $625 per and has a delta of 33%. Risk the entire premium. Those that are willing to trade the curve could opt for a NOB spread (short 30-yr bonds and long 10-yr notes 1:1).
I anticipate higher trade in the coming weeks in equities and think money will flow out of Treasuries. Use the Fibonacci levels in the chart below to help with price objectives.
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