Moment of Truth for Bond Yields

Published on
November 8th, 2018
Topic
Technical Analysis, Positioning, Trading
Duration
6 minutes
Asset class
Bonds/Rates/Credit

Moment of Truth for Bond Yields

Technical Trader ·
Featuring J.C. Parets

Published on: November 8th, 2018 • Duration: 6 minutes • Asset Class: Bonds/Rates/Credit • Topic: Technical Analysis, Positioning, Trading

Are U.S. Treasury yields finally breaking out? J.C. Parets of All Star Charts reviews the current setup and lays out his thoughts on the U.S. bond market. He highlights what investors should pay attention to and explains how to make the trade. Filmed on November 5, 2018 in Sonoma, California.

Comments

  • IJ
    Ilan J.
    14 January 2019 @ 00:57
    I tried to sign up for this guy’s service and had questions about how to use it, and then tried to cancel it, but never got any responses to anything. Just a heads up folks.
  • SB
    Stewart B.
    25 November 2018 @ 12:57
    Looks as though global economies growth is flat to slowing. Lower oil prices means lower inflation means lower sov bond yields. Both of these support JC's thesis.
  • NI
    Nate I.
    12 November 2018 @ 02:48
    The economic fundamentals agree with your technicals. High probability bonds go higher.
  • VP
    Vincent P.
    11 November 2018 @ 16:22
    Agree 100% although along with flatteners (intermediate term can still rise faster making IEF underperform), I thought it would be prudent to get long some out of the money TLT Puts for 19Q1, in case this thing gets out of hand such as a blowout CPI this week. So yea, IEF, TLT maybe even some AGG with an apocalyptic long end short hedge. More vol on the way! Good call and great analysis. Thank you!
  • cr
    chris r.
    9 November 2018 @ 21:16
    I love your videos JC. You,re animated and to the point. Keep up the good work.
  • JQ
    JACK Q.
    9 November 2018 @ 07:03
    shouldnt speculative positioning be more meaningful than the hedgers?
  • EF
    Eric F.
    9 November 2018 @ 03:46
    Great video, like this guy a lot. Good presenter but also seems to make a lot of sense. Agree a lot of the other trade idea videos could benefit from this. Love the snappy content. TBH, more than 5 mins is too long. They’re ideas, you need to work off of them, i.e. do your own due diligence. The 10-15 minute videos are just too long. I have this called a life RV!
  • Pc
    Porter c.
    9 November 2018 @ 03:08
    Historically banks go down in a rising rate environment so doesn’t that mess up your whole thesis?
  • JF
    Joseph F.
    9 November 2018 @ 02:49
    Excellent presentation.
  • KF
    Ken F.
    9 November 2018 @ 01:41
    JC if you have conviction why not load the boat w $ZROZ. #BigBalls
  • DC
    Douglas C.
    8 November 2018 @ 18:36
    I agree with Federico's comments. The best trade ideas challenge me to examine my own methods toward trading. This is one of those. I am not in this trade and I don't agree with some of his methods but they are well constructed and presented. Thanks
  • SV
    Steven V.
    8 November 2018 @ 18:26
    Spot on. QE = higher long-term yields, therefore QT = lower long-term yields. There's a reason the "Smart Money" is long bonds.
  • DS
    David S.
    8 November 2018 @ 18:16
    I know that I am a majority of one, but US bond interest rates can still go up. In 2018 the treasury is expected to issue $1 trillion marketable debt. In 2019 this is expected to rise to $1.4 trillion without a recession. The world is awash in debt both private and public with increasing risks of defaults. Defaults will drive more lenders to US debt, but where is the balance? How much of the smart money is in this trade just for a safer bet than the stock market for now? How much of the smart money is generated from risks in the venture capital market? The smart money may also be betting on the Fed to save them if the trade goes sideways. Longer-term rates are market driven. The smart money is probably correct but be careful. Do not let a trade become an investment. DLS
    • DS
      David S.
      8 November 2018 @ 18:27
      It is easy to see that I react more from fear than greed. DLS
    • FM
      Faris M.
      8 November 2018 @ 22:37
      Very good argument by JC. I agree with you David. I think we’re potentially in the beginning of a bond bear market (called by Jim Grant & Peter Brandt). I’m not shirting it because you bleed in yields. I forgot where I heard it but someone either on RV or MacroVoices said bond traders are unfairly characterised as the ‘smartest’ traders when over the last 36 years all they had to do was buy them. Also if specs are record long who are they going to sell to?
    • ST
      Simon T.
      9 November 2018 @ 13:11
      What if all 3 risk free tsy, high yield and equities all tank? Bonds are tricky here, just saying
  • MC
    Minum C.
    8 November 2018 @ 17:13
    JC is the real deal and is very good at what he does. The presentation here is perfect.
  • AA
    Aymman A.
    8 November 2018 @ 16:59
    This is very well presented. Agree that this is how the Trade Ideas section should be done
  • DS
    David S.
    8 November 2018 @ 13:06
    A note of caution on sector correlations... Before 2018 = QE After 2018 = QT
  • FM
    Federico M.
    8 November 2018 @ 11:46
    Regardless of your view on the actual trade, imo, this is how an idea should be presented in the 'Trading Ideas' section; clear, concise and specific. Thought process > levels > execution. Thanks J.C.
  • TJ
    Terry J.
    8 November 2018 @ 10:18
    Superbly concise, and persuasively argued. I'm persuaded, especially if as Raoul believes the equity market will soon decline further. It looks like the smart money is already positioned for this! Thank you.
  • CM
    Carlos M.
    8 November 2018 @ 09:49
    JC 2 questions. 1 what is the time frame you have on this ? 2 yesterday's close was 9.92 is this trade valid ? or should we expect a leg lower before it turns. I am bullish on bonds as well, specially since economic data has been weak the fed will get more dovish, plus the scarier the world gets the more money will flow to treasuries. and I am a big believer all this world wide QE experiment will end up very badly. ( just to clarify I am not a permabear, I have been bullish before, just not seeing a light at the end of the tunnel )
    • EF
      Eric F.
      9 November 2018 @ 03:56
      Good questions Carlos - it has already triggered SL, plus a timeline would be super useful.
  • PM
    Paul M.
    8 November 2018 @ 09:40
    What about ever-increasing supply of USTs and piss poor auctions of late? What about negative yields on JPY and EUR basis? Who's gonna buy USTs is the question one should be asking, not drawing lines for yields.
  • Nv
    Nick v.
    8 November 2018 @ 09:34
    Thanks JC. Food for thought

More Episodes