In the immediate prior post, I mentioned that the bond market
is in a cyclical bear phase but that the long Treasury was
oversold short term (April 4).
As I study it, I realize that the market is proving capable of
considerable volatility. I am thinking about the very sharp
and temporary run-ups in the $TYX yield that happened in the spring
seasons of both 2004 and 2005. So, the $TYX which crossed over and
closed above 5.00% today, could easily rise another 30-50 basis
points in a hurry if the players are in panic mode as they now
appear to be.
There's a long side trade coming on the Treasury price ($USB)
but I think I will make no attempt to catch the falling knife but will
wait instead for the makings of a positive turn in MACD and the stochastic.
I have been playing in the bond market as trader and investor since
early 1970. The behavoir of the market over the last two - three
years is a bit ditzy or dotty in my view, almost as if there's a new
generation of bulls coming in just as a major sea change is forming.
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