Bonds (zbu) and 5YRs (zfu) ended the past week neutral…which I suppose makes some sense ahead of Jackson Hole. As I wrote in my newsletter yesterday, bond bulls made a pretty good statement back at the start of August – but have been unable to take prices thru the 3% yield. If they accomplish that, look for a move to 145.25. The bull’s goal however is to take prices thru 145.25 and print 146.14. ZBU is vulnerable to the downside back below 144.05.
5YRs went out Friday at 113.20_2 – with 113.20 being a meaningful futures price – and 113.19_2 the 2.75% yield. A push higher from here targets 113.31; weakness targets 113.12.
Hopefully the market will get the insight it needs from Powell/Jackson Hole and we’ll see better price action late in the week and into the Fall.
Remember to check for updates to these early thoughts on my Twitter feed.
I also will get back to using my Trade Bond Futures facebook page. I haven’t used it in several months; perhaps we’ll even do a few of those live videos again….be sure to keep tabs on it.
On a different note, I recently had an old client contact me to get back into trading. He’d been away for a couple years; if I recall he had been able to trade around his job – but when his job got more demanding he had to stop trading.
I remember him as being a pretty aggressive bond trader in the respect that he held trades if there was an identifiable target. Even when he was with me years ago - let alone in the current market - I always found that pretty ballsy – to have a 10-12 tick winner but holding it because the target said 15 ticks.
The week he came back was a pretty tough trade; the typical bond market of late: full of headfakes, sideways drifts…one good move…back to drifting…and I wondered how he did. Heck, in the years he’s been gone some very good bond traders have shunned that market to focus on 10-years and 5-years. After his second week we had an email exchange and he answered “so far so good.”
Between that –and another long time client who routinely reminds me of his success with one of our setups (usually when I didn’t take the trade!) it serves as a reminder that if you can learn to trade you will always be able to trade. Maybe it’s like riding a bike: there are basics to it that never change….these two clients are showing me that….and that will help my trading going forward.
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Thanks for reading.