10yr & 30yr Bonds Still Contrary Bullish

A look at long-term Treasury bonds here on Fed QT day

So yields bumped up over the last week or two and bonds declined. But the sentiment backdrop of Public (lack of) optimism (OPTIX) and Commercial hedging still indicates a constructive atmosphere for bonds (I know, I know… the Fed is maturing 28B today… blah blah blah) and odds are that our Continuum is not going to break to the upside in the near-term. This in keeping with oh… decades worth of history. Side note: The 30yr yield does have a sneaky bullish look to it on the monthly chart.

tyx

But the sentiment backdrop is still very bullish for the 10yr bond going by the OPTIX and Hedging data. From Sentimentrader:

Sentiment is less bullish for the 30yr, but still constructive.

The above seems to fit with sideways-going inflation expectations (ref. TIP/IEF, TIP/TLT and the 10yr Breakeven Inflation Rate). It could also fit with a market correction scenario as improbable as it may seem to a majority (still convinced yields will rise), and a liquidity event, if that is what is ahead, could put the herds into long-term bonds temporarily in a flight to risk ‘off’; Fed QT or no Fed QT.

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