As of this post 30-yr bonds are probing the down sloping trend line that has capped rallies since the first week of December. With a settlement above the 9 and 20 day MAs we’ve seen today I expect a trade higher. The inverse relationship to equities also would support a move higher. My suggestion is to use the Fibonacci levels as your targets on the way up. As opposed to gaining bullish exposure I would prefer to be a seller from higher levels.
While this is a chart of 30-yr bonds I am setting clients up to establish bearish positions from higher levels across the curve. That ranges from on the long end with 30-yr bonds all the way to the short end with Euro-dollars… contact me for specific strategy, risk levels and profit objectives. I am not in the camp that there is a bubble in the debt complex but it is very possible that the multi decade bull market has ended so if not willing to trade futures/options perhaps lighten up on your bond portfolio as it could be a $hit storm if and when yields start moving higher. In full disclosure that may not be for several years so don’t think there will be instant gratification…just my opinion.
To discuss in more detail this chart or any other you can reach me at: mbradbard@rcmam.com or 954-929-9997
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