On the one hand, Treasuries became short-term quite oversold last Friday. In addition, we have a huge FOMC week, compete with new forecasts and a Chair Yellen press conference this coming Wednesday.
And yet, Treasuries continue to stage weak intraday bounces which have been sold into.
As I noted on Friday, I took partial profits in my TBT TMV bearish ETF”s inside 12631. However, I retain positions in both and am actively seeking to add back this week.
On the daily chart for the TLT ETF, below, should we see bonds continue to bounce softly into the Fed it may very well set up a “bear flag” pattern (light blue lines) before another drop lower in bond prices, and thus another spike up in rates.
At that point I would be inclined to add back to my shorts.
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