If they are all buying (bonds) then … SELL (5s), Mortimer, SELL!!!!
In AN EARLIER POST with some technical bond market levels, a couple of sell side firms watching long bond yields vs 1.75% or thereabouts. The level noted is MORE significant on a WEEKLY (ie post NFP) closing basis BUT it was / is noteworthy that SHORTS are more than likely being forced to run for some COVER NOW, as stocks moved from up to down and took RATES with them.
Discipline.
That in mind, from the inbox short while ago … 10yy:
… Short-term Strategy: We maintain our tactically bearish view from resistance at 1.425%, with support seen at 1.82%, where we would turn tactically neutral. Resistance stays at 1.415%, below which we would also turn tactically neutral.
AND 30yy:
… Short-term Strategy: We recently turned tactically bearish at resistance at 1.825% and still see scope for support at 2.105%, where we would turn tactically neutral. Resistance stays at 1.75%, below which we would also turn tactically neutral.
Not all was lost in this shuffle and the current risk off BID FOR BONDS can / will be used as another chance to reset ones SHORT. This from same sell side source on the all important Fed-related 5yy:
… Short-term Strategy: We turned tactically bearish on Wednesday following the pullback to resistance at 1.095%, with scope for support at 1.40%, where we would turn tactically neutral. Next resistance below 1.095% is seen at 1.04%, below which we would also turn neutral.
Discipline cuts both ways and Mr. Market LOVES when folks draw ‘red lines’ and tends to sniff these positions out, torment them, and when that last one is painfully rinsed from the trade, well, you know what happens next.
NFP @ 750k, anyone (aside from Swonk)?