TLT is now DOWN over the past 63 days, the first time in ages.
Could this portend a much bigger move down?
I was buying TLT on the latest pullback and then exited on the recent rally and am looking to go short here.
It seems like the momentum is turning down and that QE is failing to drive TLT any higher. Money seems to be flowing elsewhere, perhaps Muni Bonds and Junk Bonds.
Rates here in the US are lower than Government bonds abroad, but the market is losing momentum.
The risk is low for shorting here and if a rally does start, I will be jumping back on the upside momentum.
Cheers,
Tim 4/8/2015 11:19PM EST
Comments
SPYderCrusher
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yes I think I posted in your last chart that Munis were outperforming corporates and HYG in both 2014/2015, and that continues to be the case.
(see your chart here for the data --> tradingview.com/v/bhkgFLtb/)
Great work as always Tim :D
SPYderCrusher
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One thing that I am still sort of awestruck about are Eurozone yields:
And of course news that Switzerland actually issued negative yield bonds today.
Saw a funny joke on twitter, like, hey you make any moves today? Oh, not much, just bought some 1 basis point 8 yr bonds today. The joke practically writes itself.
Anyway you have any thoughts on that? Not really in my purview trading wise, but for topical interest, pretty extraordinary situation, curious to her your thoughts
timwest
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I agree the background of this trade isn't intuitive because of the relative buying that should be going on from central banks and others willing to arb the spread between the rates. Why not "sell short that 1 basis point paper and buy US paper with 200-300 basis points?" But despite that arb, the market isn't going up. So, I just think we need to go down until we find the bottom. If you can't rally on good news, typically you see a sell off. That's all I'm looking for.
Justiceisfalse
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What do you have for a target? Test the 123s again?
Justiceisfalse
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Disregard that comment, I didnt mouse over your targets on the chart...
(see your chart here for the data --> tradingview.com/v/bhkgFLtb/)
Great work as always Tim :D