Let’s Talk Bonds

More specifically let’s talk about the 30-year treasury bonds. It’s one of the most interesting setups right now and if things work out it may just turn into the trade of the year. Once again I’ll throw the short term chart to wolves and the juicy long term is reserved for the subs:

On the daily panel the ZB is in the process of breaching through its daily NLSL. That’s all nice and peachy but T1 in the form of the 100-day SMA is directly below at around 141’10. Hanging out all casual around 140 we also have the lower 25-day BB line – adding additional support. That’s not exactly the money trade I have in mind. So being long once we get there is absolutely a reasonable technical setup.

However, continuing with yesterday’s theme the long term chart is a LOT more interesting – please step into my evil lair:
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The weekly chart is pretty much confirming what’s shown on the daily. BUT more importantly the implications of a support line failure is what getting me all hot and bothered. The monthly shows us as a rally that’s getting a bit long in the tooth after painting outside both BBs for several months. Now we’re back inside the 25-day BB and the next monthly support line would be near 136, however I think the weekly may lead us all the way to 130. All that assuming of course we get that coveted support line breach. Which admittedly is a bit tough to trade – there are no NLSLs or much else to hang our hat on. So we’ll have to go by price alone. Paging Dr. Convict – Dr. Convict please report to the evil lair!

Bottom Line: I would be long here until proven wrong and getting stopped out. Upside target area is around 147’00. If that stop below that diagonal gets touched I plan to flip the trade and hold it with a stop now a few ticks above that diagonal. Bear in mind the 25-week SMA looming below – if we get there you want to partially scale out. OR you can start small and pyramid yourself up in positions if/once we breach that 25-day SMA as there’s nothing but air below. It all depends on your style of trading – I usually prefer the latter in that I like for a long term trade to prove me right. Short term things are a bit too dynamic these days.

The weekly is
[/amprotect] Cheers,