My first thoughts and reactions:
1. LOL, OMG! :-D Spanish 10y yield only 1,02 % higher above Bund??? And it is still trading at all time low???
2. Why not trade it right now? Short Bono / Long Bund
3. Bond investors have completely lost their minds, or did Central Banks, or both? :-)
- Price (yield spread) is still at historic all time low at 1 %, quite far below equilibrium level (marked by Kijun and Senkou B around 1,30). For this reason is stillbearish, but first key supp/res levels are not so far above: 1,23 % and 1,30. The real key level would be 1,50, and if you look back on the chart, you can quickly understand why is 150 bps so important! If things go wrong in Eurozone, there would be a huge open space above up to 350 or even higher!
- haDelta and DMO have built quite some positive divergence during last 2-2,5 months.
- Heikin-Ashi may give a possible swing buy signal this week. ECB policy will be decisive.
- EWO shows some positive divergence too
- back to neutral, with bias ahead in forward Kumo!
- Heikin-Ashi is swing , price is above Kijun Sen
- EWO back to zero -> neutral, not any more
- has positive divergence and a cross up (remark: quite some noise of crosses recently, histogram should confirm later)
Any more question regarding risk/reward?
But I like the idea! Makes no sense that given Spain's problems they should be anywhere near the German Bund.