US 10 year bonds trigger sell set up

Hi,

There’s plenty of volatility at the moment but not much of it is translating into clear new trends.

Investors underweight risk are understandably nervous about missing out on some of the value currently on offer if there is a reasonable resolution to the Greek situation. Equity markets have had a couple of strong days but this has not been enough to trigger many “risk on” set ups in the charts that I am watching. Traders appear to be waiting for some concrete evidence from the Greek Government and the banks before committing too much

The US bond market looks to be one exception. Yields rose sharply last night suggesting that investors are looking past current “flight to quality’ concerns and anticipating a steepening of the yield curve as QE 2 ends, economic growth improves and inflation concerns are rekindled

I posted a set up on 17 June. I won’t repeat the details here but you can access it vial the link below.

http://blog.cmcmarkets.com.au/2011/06/17/us-10-year-bond-interestingly-placed-for-a-risk-on-scenario

As the chart below shows, yesterday’s jump in yields (sell off in bonds) represents a rejection of the Fib cluster zone and potentially the end of the recent corrective decline in bond yields

US 10 year bond yield index. Source: Bloomberg

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Bonds, Trading. Bookmark the permalink.

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