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Peak Theories Believes A Short-Term Treasury Rally Is Imminent

Tyler Durden's picture





 

Submtted by Abigail Doolittle of Peak Theories

Treasurys to Rally in the Near-Term? (pdf)

 

 


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Fri, 01/07/2011 - 17:46 | Link to Comment Misean
Misean's picture

Bouncing up and down around a negatively sloping curve...hmmm...pretty ballsy prediction there.  Kinda like standing too long at the craps table.

Fri, 01/07/2011 - 17:48 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Looking forward to that correction in gold "..to the pattern's downside target of $1284 per ounce or even to the $1156.."

Bring on Da Krusha

Fri, 01/07/2011 - 17:56 | Link to Comment RobotTrader
RobotTrader's picture

Not so fast.

One of the crack vehicles I'm eyballing is IAG, and it has been creeping up even though gold has been going down.

Fri, 01/07/2011 - 18:00 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

I like MDMN and their neighbor on the property next door, CDCH not to mention AUMN (Dahhman Rose price target $102). But then again miners aren't the metal and I can't post the charts.

Sat, 01/08/2011 - 08:05 | Link to Comment liberal sodomy
liberal sodomy's picture

I'm long physical bullion and short same amount of GLD.  Hoping for the trade of a lifetime.

Sat, 01/08/2011 - 11:53 | Link to Comment swissinv
swissinv's picture

a good hedge with full reward potential

Fri, 01/07/2011 - 17:51 | Link to Comment RobotTrader
RobotTrader's picture

Might be worth a buy, in case this "bearish consolidation" morphs into a huge boner run once the next QE program is started in earnst.

Fri, 01/07/2011 - 17:56 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Looks far more like a ginormous head and shoulders than any kind of "boner"

Fri, 01/07/2011 - 19:05 | Link to Comment SilverIsKing
SilverIsKing's picture

That's just a paint job.  There is no stopping QE to forever so it's only a matter of time before metals begin their next run upwards.

Fri, 01/07/2011 - 21:23 | Link to Comment SwingForce
Sat, 01/08/2011 - 12:03 | Link to Comment Star Warrior
Star Warrior's picture

Who listens to this crap?

Sat, 01/08/2011 - 12:03 | Link to Comment insidious
insidious's picture

Robo - any further thoughts on TLT? I am currently long TLT but hedged with TBT - so I am just collecting dividends from TLT and staying pretty flat on a cost basis - even though TLT has been dropping. I am looking to remove the hedge if TLT looks to rally off any oversold condition.

Sat, 01/08/2011 - 12:43 | Link to Comment TBT or not TBT
TBT or not TBT's picture

Yes, do tell.    TBT isn't my middle name, it's my first and last names.

Fri, 01/07/2011 - 18:23 | Link to Comment FredHayden
FredHayden's picture

She could be right as a short term trade.  Treasuries rally when people get nervous.  Right now sentiment is crazy high, nobody is scared.  On a 5% or 10% market correction treasuries could pop.  SPY was down .20% today and TLT was up .53%   Long term it makes no sense to own treasuries.

Fri, 01/07/2011 - 23:56 | Link to Comment Spitzer
Spitzer's picture

They could also fall with stocks like they do in every other country.

Sat, 01/08/2011 - 13:46 | Link to Comment DosZap
DosZap's picture

Do you folks not think the PIIGS being in real trouble again is going to be the catalyst for this?.

The ecomomic numbers, and ADP data was a flat assed lie, there is no reason for that to be remotely considered good nees.

Fri, 01/07/2011 - 18:35 | Link to Comment buzzsaw99
buzzsaw99's picture

I like the long term bearish S&P forecast at the end. Yowzers!

Fri, 01/07/2011 - 18:45 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

WOW I just noticed that. Stuck in there at the bottom with the fine print don't sue me's. SPX target 36 months: 425. Elliot wave calls are for something similar in a like minded time frame.

Fri, 01/07/2011 - 19:00 | Link to Comment themosmitsos
themosmitsos's picture

Outstanding, and come to think of it, don't ever remember seeing something from them that I didn't like. Hmmm

Fri, 01/07/2011 - 19:01 | Link to Comment Common_Cents22
Common_Cents22's picture

the question is:  do TPTB need a treasury rally?   that is the question.

 

If so, hopefully somebody over the pond gets sacrificed, if that doesn't happen, they just pull the HFT plug for a little flash crash.  Boom, flight to "quality".

Fri, 01/07/2011 - 19:06 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Treasuries are laden with cross currents.

1) Default is not going to happen.  But in November Ireland default was on everyone's mind, and the cross current du jour that moment turned out to be that people would not flee to safety because of it.  Rather, they began to think that if Ireland could then maybe . . . . . .  THIS was the cause of the hit to Treasuries. It was not green shoots.

2) If you believe in slow or no or negative growth, then you are a Treasury bull.  Period.

3) Ireland's election is in March and odds are AT LEAST 50/50 the new government will renege on the IMF/EU deal.  This could put us right back in November for Treasury psychology.

4) The avowed purpose of QE2 was to lower Treasury rates.  Period and in a concrete fashion, full stop.  Economic growth and lower unemployment were to DERIVE from the lower rates.  There was not supposed to be magical growth and lowered unemployment from QE2.  Those parameters were supposed to DERIVE from lower rates.  QE2 is a FAILURE.  It has not lowered rates.

 

Fri, 01/07/2011 - 19:05 | Link to Comment Wheatman
Wheatman's picture

Tyler, I must agree with you that even toilet paper has a price, and even tulips can get short term bids. Such is the UST market. The real fun will begin when the Bernank loses control of the curve, the USA collapses, war breaks out, more crabs die, and someone sets the reset button.

Fri, 01/07/2011 - 19:08 | Link to Comment SilverIsKing
SilverIsKing's picture

And the award for First Bank Failure of the year goes to....drumroll please....

First Commercial Bank of Florida, Orlando, FL

Cost to DIF = $78 million

Fri, 01/07/2011 - 20:29 | Link to Comment Rainman
Rainman's picture

,,,,,whew....that was cheap.

Fri, 01/07/2011 - 20:08 | Link to Comment Jasper M
Jasper M's picture

I agree with the forecast (for Treasuries and S&P), but I expect the scale of the Treasury bounce to be modest enough to not be worth going long for.

Fri, 01/07/2011 - 20:10 | Link to Comment the rookie cynic
the rookie cynic's picture

Question for you all: If Congress votes to raise the debt ceiling (which it looks like they will), how can anyone think bond prices are going to rally? (Not to mention the profligate spending of the current Congress and the Feds reckless money printing.)

Fri, 01/07/2011 - 20:44 | Link to Comment FredHayden
FredHayden's picture

She thinks they can rally short term, but not long term.  Long term, the value of treasuries is only going down, as you point out.  Short term, the market is very overbought, and if it corrects, treasuries will probably move up.   Not for long mind you.   She is presenting a trading idea, not an investing idea.

Sat, 01/08/2011 - 10:26 | Link to Comment KickIce
KickIce's picture

So you think the conventional thought is stocks to treasuries and finally to metals?  By then it's too late. 

Fri, 01/07/2011 - 20:50 | Link to Comment Orly
Orly's picture

It would certainly be a catalyst if they did not raise the debt ceiling but can anyone really believe that they will finally put their foot down and say enough is enough?

Didn't think so.

I can't think of another outside force besides the Euro going into the tank that would cause such a rally.  That would only happen if there were very, very serious justification by way of sovereign debt that hasn't been priced in yet.  In short, without another Black Swan event, I just can't see where the rally would come from.  Yields may move back to three on the ten-year for technical reasons, briefly, but it would hardly be what one would call a rally in Treasuries.

Stocks are churning madly trying to stay afloat and the US economic numbers are certainly looking less bad.  I guess we'll see.

Again, it is going to be another interesting couple of weeks ahead.

Sat, 01/08/2011 - 13:51 | Link to Comment DosZap
DosZap's picture

Orly,

the Debt Ceiling must be raised, NO way out, you are dead on.

If its not, its default, no way that happens.

Fri, 01/07/2011 - 20:26 | Link to Comment Rainman
Rainman's picture

On a long enough timeline every asset can rally, bubble and bust until it does none of the above anymore. Return to the mean is a bitch, bitchez.

Fri, 01/07/2011 - 20:44 | Link to Comment ZeroPower
ZeroPower's picture

Short USTs is gonna be the trade of the decade. Just not sure which decade..

Fri, 01/07/2011 - 23:08 | Link to Comment RoRoTrader
RoRoTrader's picture

Very astute, and very funny too. Doubled up on that USD/CHF long the second time around so thank you r squared.

Sat, 01/08/2011 - 11:16 | Link to Comment ZeroPower
ZeroPower's picture

Yes, a good play for the long term or if you want to play the bounce off 9350s

Fri, 01/07/2011 - 21:06 | Link to Comment monopoly
monopoly's picture

I think we know long term this cannot last but could you imagine if were all short for the past year or so. I guess we would also be on food stamps by now. I just wish we could move this along, blow up the system, fire the inmates, take the pain, and there will be pain, get the spoos to 666 and then start over, for real. This delay is just making the end game that much more painful. But it will go on and on for a long while.

Very little I see out there shows me that we have "real growth" without stimulus. This crap has to stop some day. Maybe after we hit the 20 trillion mark it will be over. I know, buy the dips, no shorts, eat a burrito, CMG or take a vacation, PCLN. Just beyond words all.

Sat, 01/08/2011 - 01:05 | Link to Comment teotwawki
teotwawki's picture

Thats funny. I agree the market is so boring now, just a never ending grind higher based on huge buying volume at the 10 day moving average. By the time I bend over and adjust my trading system accordingly this bitch will crash!! Any bears that are left just remember the glory of may 6 2010. I also believe we will correct in short order. Lookat a weekly chart and tell me goldman sachs is still buying. This fuckers gonna correct hard and fast and if you are just now buying, how do you like the bag? I dont know how many times we have to repeat this pattern but I just heard another anal ist say how we are prepared for a slight correction down to the 50 day moving average and then a great buying opprtunity would ensue. If you look at monthly charts of 2008 you didnt have an opportunity to buy the dips, you were fucked. My point is a bear market doesnt announce itself. It comes and then you get to be a bullish moron afterwards. Dont forget we havent made higher highs since 08. If we do it is because hyper inflation has taken hold, which it wont.

Sat, 01/08/2011 - 01:12 | Link to Comment johngaltfla
johngaltfla's picture

I'd buy the Treasury rally for 8 weeks, tops. It should roll over nicely at the end of Q2 into Q3. Technically the market is broken and will repair itself, despite the ineffective Fed intervention. I think we'll get a retest of the 2.65% range on the 10 year which will end as the 1-3-6 complex advances out of its 2 year range below 0.25% in the April-May time frame.

Sat, 01/08/2011 - 01:37 | Link to Comment lincolnsteffens
lincolnsteffens's picture

I think the TLT may be forming an upside down cup and handle. I bought down here to play the handle up for a few weeks. Then it is back to the TBT.

Sat, 01/08/2011 - 16:30 | Link to Comment strannick
strannick's picture

So she's saying Treasuries will zigzag on their inevitable way down.

Thank you Mrs. Saylittle. I mean Doolittle

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