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Friday, January 09, 2009

First off, Joshua thanks for the nice comments!

Today I have a daily chart of 30 Year Bonds displayed. The historic upward move is clear to see, just for some perspective, 112 to 142 is $30k per futures contract in a market where in the past a good trade was $2k per contract or thereabouts.

We have had a sharp break down from an odd flat ledge at the top. If we couple this with the strong seasonal bearish tendency in January, we should be looking for a rally as indicated by the arrow to setup a shorting opportunity. I do not know if we will get it but I think we will. As far as translating this into actual borrowing rates, that is a waste of time. There has never been the degree of disconnect between Mortgage rates and the underlying longer term bond yields than there is right now. There is so much gamemanship going on with banks pricing in outrageous margins on loans, which I suppose they justify with an anticipated increased default rate. Mortgages should be 4% right now or less based on the underlying.

4 comments:

Anonymous said...

Hi Chris,

What's your opinion on oil at the moment?

Chris Johnston said...

Oil has seen commercial selling on the rally which we saw cause a dip here the last few days. I do not think we are going dramatically one way or the other. A trading range is likely.

Youri said...

Hi, Chris, i'm new in trade futures , need more help, can i have your email/MSN/skype?

Chris Johnston said...

Youri my email is mktwzrd1@gmail.com