Hello everyone. Here is a trade idea on the 30 year Treasury yield. According to the weekly chart, there is a breakout of the inverted heads and shoulders of the 30 year yield.
Macro Thesis: The FED controls the short term interest rate, and the long term interest rates are determined by the supply and demand, meaning the buyers and sellers of the long bond. The last thing the FED wants is an inverted yield curve. IF this thesis is correct, the the 30 year bull run of the long bond might be over.
According to the chart, the 30 year yield has the potential to reach 4.2% according to the inverted heads and shoulders target. With the 30 year yield up, the 10 year yield will follow, and the FED will raise rates to the neutral target of above 3%. The trade has a reward to risk of 3.6, if the stop is placed near the right shoulder.
GOOD LUCK
Macro Thesis: The FED controls the short term interest rate, and the long term interest rates are determined by the supply and demand, meaning the buyers and sellers of the long bond. The last thing the FED wants is an inverted yield curve. IF this thesis is correct, the the 30 year bull run of the long bond might be over.
According to the chart, the 30 year yield has the potential to reach 4.2% according to the inverted heads and shoulders target. With the 30 year yield up, the 10 year yield will follow, and the FED will raise rates to the neutral target of above 3%. The trade has a reward to risk of 3.6, if the stop is placed near the right shoulder.
GOOD LUCK