Monday, January 11, 2010

Short End of the Curve





The above charts are weekly views of the short end of the treasury market. Starting from the top with 1 month, then 3 month, 6 month and finally 1year note yields

I would dearly appreciate for someone to explain, given the economic recovery going on, why it is that the short end of the bond markets are yielding basically what they were back in late 2008/early 2009 when the equity markets were pricing in Armageddon.

Today we received news from the treasury that the 13 week (90day) bill auction yield was 0.04% and the 26 week (6month) bill auction yield was 0.13%

So who is right, the bond market or the stock market? The stock market is shouting happy times are here again with the bond market singing a completely different tune. I am betting with the bond guyz and galz as regular readers know my assertion that the equity crowd rode the short bus to school.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $8.49
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97

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