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Registered User
Joined: 10/14/2007
Posts: 2
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Years ago in another life I used to be a Commodities broker. One of the fun things to do then was day trade the NYSE based of the action of the bonds. It worked pretty well or at least it seemed to. Any how, I used that knowledge to keep from getting totally clobered when the maket topped in October.
How do you say?
Well as stock guys just take a look at the ETFs TIP, TLT, IEF. They all started to rally before the market top. The theory is scared money hides in treasuries. So these ETFs all bottomed before the DOW topped.
Now look at the charts again, do they appear to be topping?
Well I would say yes, where does courageous money go ?
Equities.
It's not perfect, but I would say the bottom is probly in since the S&P and DOW are trying to push up while treasury ETFs are pushing down.
At the very least if you are long Treasuries take some off the table and tighten your stop-losses!
Sustained weakness in these ETFs will show the bottom in Equities.
PS - When I was a Commodities Broker we watched the 10yr Note and 30Bond. To find NYSE tops and bottoms.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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1rstEasytrader,
Thanks for the great info. it's always a thrill to get info like this by a pro. Your post is greatly appreciated as are any other nuggets you'd like to share!
David John Hall
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Registered User
Joined: 2/5/2006
Posts: 1,148
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lol. posters here long bonds?
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (1rstEasytrader)
Well I would say yes, where does courageous money go ?
Equities.
Commodities ?
I agree that the bond markets have been traditional safe havens from storms brewing in their equity counterparts ...
But here recently ... we have also seen that action relative to commodity action ....
Case in point ...
Let's take the period of 3/17-3/19 ...
Based on the steeply falling yields ... you would think that the equities markets would be falling through the floor ... but ... it was a commodities selloff that fueled this flight to quality ...
I believe that what we have seen as a traditional relationship has become a bit skewed because of the inflationary pressures hanging overhead ... and the inherent risk that this poses to bond investors ...
Most bond investors are currently seeing NEGATIVE real rates of return ...
The current wave of investment in commodities is not an act of greed ... it is an act of desparation ... just trying to stay even ...
And isn't that what got us into this whole mess to start with ??
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"The current wave of investment in commodities is not an act of greed ... it is an act of desparation"
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That's an odd way to describe it.
So people like Jim Rogers and Dennis Gartman
are desperate?
Thanks
diceman
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (diceman)
"The current wave of investment in commodities is not an act of greed ... it is an act of desparation"
----------------------------------------------------------------------------------------------------
That's an odd way to describe it.
So people like Jim Rogers and Dennis Gartman
are desperate?
Thanks
diceman
I think you know what I meant ...
But that was quite a "spin" ...
Your real name isn't "James Carville" ... is it ?
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Registered User
Joined: 3/24/2006
Posts: 72
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Thanks for the info, I'll definitely run some correlation analysis on it. :) But just to provide balance to the conversation, do consider this: when there are many competing markets on a nation-state level, the players are not required to keep all their assets in the same system (American assets).
With the advent of other global players with possibly more attractive returns in stocks, bonds, commodities, and other investable assets, I think some amount of consideration needs to be kept in mind in regards to the relationship between US equities, US bonds, and the flight to quality (American or otherwise), as well as the major cash players in the equation.
I'll refrain from providing information that will suggest too much of a bias, but I do heartily recommend people make these considerations.
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