Monday, May 14, 2018

Tame inflation? Don't get complacent!

The Treasury market rallied last week when the 10-year Treasury yield tested the 3% level and pulled back.

The decline in yields (and bond prices rally) was not a big surprise for a number of reasons:
  • 10-year yields (TNX) was exhibiting a negative RSI divergence
  • A tamer than expected Consumer Price Index
  • Hedge funds were in a crowded short in the 10-year T-Note and T-Bond futures
While the bond market rally is likely to have a bit more leg over the next few weeks, my inclination is to enjoy the party, but don't overstay the festivities.

The full post can be found at our new site here.

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