The strong rebound that occurred Friday, confirmed the lower level of the Pitchfork. Friday's strong selling volumes suggest we marked a low.
Nice volatility and breakout showing in bottom of the range in US10Y. Take a fast look at Monthly chart: It obviously we have a support here, and we are going to reverse to 2.12 and probably to 2.55
Price is back into monthly demand looking bullish with price in this area of demand + support line.
The US Government Bond 3 Month Yield Is falling ahead of any official rate cut by Jerome Powell and the Federal Reserve Board. This effectively tells us the market is pricing in a rate cut being announced at the next Federal Open Market Committee meeting on July 30 2019. This is more significant than most traders realise. It has become common place on Wall Street...
Looking at the chart we can see the 3 month yield inverted with the 10 year yield a few weeks ago so recession could be anywhere from 12-18 months out. The question is, where do we stabilize in this current down swing? Things will probably go sideways for a while before we break support and rates dive to zero. The catalyst will be nGDP figures and Bank of Canada policy.
With US rates rising significantly in the past couple of months - how should a trader play this Being structurally short $TLT offers significant upside with a Put Butterfly Spread We have outlined trade which can be accessed on profile however a summary is provided 2 Month Put Skew is 3.62 standard Deviations above its 1 year mean 2 Month Volatility is 1.58...
Let me warn you now, this is not a fundamental or technical analysis based trade. This is a speculation on my behalf based on a simple theory. As the US Federal Reserve continues to rise interest rates up to 3x this year, is it time that a true bear market in fixed income has come to fruition? Are the "safe" government bonds becoming one of the worst asset...