Bearish Setup Forming In US Long Bonds

Be wary of 'logical' arguments that lack support from fundamental market drivers. Money flow illustrate the formation of another bearish setup into strength. There's been no buy sign for Treasurys. That fact that Gross, Sinclair, et. al. continue to fade (sell) strength better reflects the health of the bond market than any headline analysis.

When money concentrations on the short side only the blind risk takers will be long bonds. This group is also known as nonreportable traders or retail money.

US Treasury Bond 20YR+ (TLT) And Bond Diffusion Index (DI)


Headline: A 'Buy' Sign for Treasurys?

Some Bet End of QE2 Will Be Boon to Bonds

Even before last week's selloff in risky assets, investors worried about slowing growth were buying up Treasury debt. To some, this is a preview of what is going to happen when the Federal Reserve ends its bond-buying program less than two months from now.

Over the past four weeks, the yield on the 10-year Treasury note has fallen from 3.58% to 3.16%, its lowest level since December. The bond market rallied even though the biggest buyer of Treasurys over the past several months is planning to leave the market at the end of June.

Gains in Treasurys have been driven largely by weak economic data. Even a better-than-expected jobs number Friday couldn't derail the market.

Source: finance.yahoo.com