Commodity price pressure is the one which will cause inflation anyway in medium term, therefore affects bond yield to go up in the similiar term (fight inflation!). Shorting 5yr bond and at the same time buying 2yr bond should give us positive MTM provided current credit crunch will continue for another year which forces Fed to ease overnight rate more. In short, play with the balancing process of inner force of Fed's rate easing and outter greater force of international commodity market. Reply
I value an unbiased presentation of data when the impetus of the article claims to be as such. When I want someone to tell me it's all clear to pull the trigger, I pay 2.7% APR on my total account equity to listen to my professional broker tell me what to buy. Reply
I always figured the point of reading these things was to extract the info (if any), and come to my own conclusion, then act accordingly. (FWIW, I'm nibbling a bit, but still keeping some powder dry).
If I read one more article about how 'the market may or may not be turning', may be 'going up or down from here' ,but 'we will just have to wait until it's over to be sure', my head is going to explode.
Come on, people! Be bold, take a stand for once in your life. Reply
I'd be leery of applying _stock_ technical chart patterns and chart analysis to _bond_ ETFs. The factors that move Treasuries (and, for Goatfarmer, TIP) are not the same as those that move equities.
Although bond yields can't stay low forever, it's historical fact that the 10-year Treasury yield did stay very low, and I think didn't cross above 5% at all from about 1930 to about 1966). The stock market of course doesn't behave like that.
In any case, there's a significant probability of a deflationary scenario playing out (e.g. Great Depression, Japan 1990s, and plenty of other countries historically) in which case long bonds will do very well, while TIP will get crushed since the return will be exactly zero. Conversely, in an inflationary crisis, the long treasuries will get crushed (as in the 1970s) but TIP will lag since government will have strong incentives to continue to suppress the CPI readings, to avoid a medicare/social security death spiral. If you believe in inflation, equities or hard commodities could do better. Reply
I'm not an expert on bond fundamentals. However, I little experience with classical technical patterns. The one I see for TIP, the inflation-based bond, is one of the most bullish long term patterns I can recall. There is a chart of TIP on the next edition of my website. Take a look on Monday or Tuesday, by which time it should be uploaded. Reply
I have some PFN. It is an Adjustable Rate Loan fund. As short term rates are currently going down, its monthly payment is being reduced and current holders are selling. This is causing PFN to sell at a discount to NAV, it is an PIMCO/Allianz ETF.
If you believe, as I do, that the future direction of interest rates are higher than these type of funds may be the way to go.
One caveate, as rates go up marginal borrowers will go belly-up at a higher rate. Reply
I have been watching closely. I am considering moving some of my longer term bond holdings over to Commercial Paper funds (EFR and FCO) and an inflation protected money market. It sounds insane, but I know what inflation an do to bonds. I am desiring to be in short (maybe intermediate, maybe) timeframes. I want instruments that will adjust upwards when rates do. Any thoughts or feedback. (I am also tilting my equity investments towards large cap growth to combat inlation as well) Reply
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Keep an Eye on the Stock/Bond Ratio [view article]
Buy really really low and sell really really high.... now you have been told what to do. JJ ReplyIs Rising Inflation Creating a Headwind for Long Bonds? [view article]
Commodity price pressure is the one which will cause inflation anyway in medium term, therefore affects bond yield to go up in the similiar term (fight inflation!). Shorting 5yr bond and at the same time buying 2yr bond should give us positive MTM provided current credit crunch will continue for another year which forces Fed to ease overnight rate more. In short, play with the balancing process of inner force of Fed's rate easing and outter greater force of international commodity market. ReplyEditors
General Discussion on TNX
Is this a buy or a sell? ReplyElliott
Keep an Eye on the Stock/Bond Ratio [view article]
I value an unbiased presentation of data when the impetus of the article claims to be as such. When I want someone to tell me it's all clear to pull the trigger, I pay 2.7% APR on my total account equity to listen to my professional broker tell me what to buy. ReplyKeep an Eye on the Stock/Bond Ratio [view article]
300 MPH,I always figured the point of reading these things was to extract the info (if any), and come to my own conclusion, then act accordingly. (FWIW, I'm nibbling a bit, but still keeping some powder dry).
Jan Reply
Keep an Eye on the Stock/Bond Ratio [view article]
If I read one more article about how 'the market may or may not be turning', may be 'going up or down from here' ,but 'we will just have to wait until it's over to be sure', my head is going to explode.Come on, people! Be bold, take a stand for once in your life. Reply
seeker
U.S. Long Bonds: Be Careful, We're in Injury Time [view article]
I'd be leery of applying _stock_ technical chart patterns and chart analysis to _bond_ ETFs. The factors that move Treasuries (and, for Goatfarmer, TIP) are not the same as those that move equities.Although bond yields can't stay low forever, it's historical fact that the 10-year Treasury yield did stay very low, and I think didn't cross above 5% at all from about 1930 to about 1966). The stock market of course doesn't behave like that.
In any case, there's a significant probability of a deflationary scenario playing out (e.g. Great Depression, Japan 1990s, and plenty of other countries historically) in which case long bonds will do very well, while TIP will get crushed since the return will be exactly zero. Conversely, in an inflationary crisis, the long treasuries will get crushed (as in the 1970s) but TIP will lag since government will have strong incentives to continue to suppress the CPI readings, to avoid a medicare/social security death spiral. If you believe in inflation, equities or hard commodities could do better. Reply
U.S. Long Bonds: Be Careful, We're in Injury Time [view article]
I'm not an expert on bond fundamentals. However, I little experience with classical technical patterns. The one I see for TIP, the inflation-based bond, is one of the most bullish long term patterns I can recall. There is a chart of TIP on the next edition of my website. Take a look on Monday or Tuesday, by which time it should be uploaded. ReplyShlapak
U.S. Long Bonds: Be Careful, We're in Injury Time [view article]
Granger,I have some PFN. It is an Adjustable Rate Loan fund. As short term rates are currently going down, its monthly payment is being reduced and current holders are selling. This is causing PFN to sell at a discount to NAV, it is an PIMCO/Allianz ETF.
If you believe, as I do, that the future direction of interest rates are higher than these type of funds may be the way to go.
One caveate, as rates go up marginal borrowers will go belly-up at a higher rate. Reply
U.S. Long Bonds: Be Careful, We're in Injury Time [view article]
I have been watching closely. I am considering moving some of my longer term bond holdings over to Commercial Paper funds (EFR and FCO) and an inflation protected money market. It sounds insane, but I know what inflation an do to bonds. I am desiring to be in short (maybe intermediate, maybe) timeframes. I want instruments that will adjust upwards when rates do. Any thoughts or feedback. (I am also tilting my equity investments towards large cap growth to combat inlation as well) Reply