Treasury yields still on plan

And the plan is for a bond yield pullback from hysterical highs

With respect to the long end of the Treasury curve, both the 30yr (top) and 10yr Treasury bond yields are below their daily SMA 50. Since inflation and the yields that indicated it have been public enemies 1 and 2, a continued pullback is probably needed for the Q4-Q1 seasonal party to have some endurance.

10 year and 30 year treasury yields

The monthly ‘Continuum’ view of the 30 year Treasury bond yield is still in potential reversal mode, pulling back from 4.4% to 3.8%. We will manage downside potentials into H1, 2023 if this proceeds as expected.

I marvel at this chart because the hysterical spike of 2022 could well be a sentinel scouting out the future and a different macro backdrop than anything we’ve seen over the last few decades. But for now the plan is for a pullback to the potential benefit of the Q4-Q1 seasonal relief plays, getting a new bounce in their step and holding today. *

30 year treasury bond yield

* This includes the energy sector, on which I failed to take a significant profit on a short position yesterday and today took a partial small one. On balance though, things are going fine in the relief trades with gold and silver stocks out front. At some point, however, gold stocks will have to differentiate from the general relief in the inflated stuff. But it’s a bit of a silly seasonal now, so it could take into H1, 2023 for that to shake out.

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This Post Has 2 Comments

  1. MikeC

    You had a “wouldn’t it be cool” target in #730 for TYX. You’ve been playing a good amount on miners, and with the recent energy short.

    Assuming we get anywhere near your target, have you been giving any thoughts to TMF/TMV/TLT as a medium term play?

    1. Gary

      Yes, I am thinking about it. I got sidetracked buying individual bonds, but have decided that’s not really for me. So I may dumb it down to TLT, IEF, IEI and/or SHY. But with cash paying something for the first time since Bernanke outlawed saving, cash is fine too.

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