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 -Monday, November 08, 2010
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| T-Bond Commentary |
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| Brian Heyliger, Professional Trader/Instructor |
 If you’re still long the ‘long bond,’ please don’t say I didn’t warn you.During the past three weeks, the 30-year long bond yield rose almost a full 1%. IN JUST THREE WEEKS! Here’s a chart of what that yield looks like: It might not seem like much of a move, but when you compare it to the typical rate change the Federal Reserve makes, its four-times as a large. It’s a massive vote by the ‘free market.’ Add to that the effect it’s had on long-term bonds - the 30-year long bond dropped more than 3-points in less than a hour last week, as the Federal Reserve announced its $600 billion purchase program. Now, you know I’m horribly bearish on long-term government debt - I think bonds are in for world of hurt in the coming months and years ahead. This is my opinion and the is risk of loss in every trade. I haven’t been day trading bonds as actively as I usually do, because I’m quietly and patiently waiting for the opportunity to short them on a scale which I’ve never done before. I want to build a massive short position in the long-bond futures contract. It won’t be a risk free trade, but it’ll be a trade with massive reward potential, the kind of trade you don’t want to miss. With the potential for reward comes the risk of loss. If you’re still long U.S. bonds (short interest rates), now is not the time! In my opinion. Start thinking about how you can play the short side. Click here to return to the Weekly Newsletter & Commentary |
