The bond market was doing funny things yesterday, at least at the short end of the yield curve. The hourly chart of the 3-7 year T-Bond (IEI) below shows a gap up on huge volume, and then selling the rest of the day. SPX price did take a 10 point dip at the time, but recovered. Who was selling on strength? The 1-3 year T-Bond had money outflows of -512.65 in millions (SHY), the 3-7 year T-Bond had outflows of -362.60 in millions (IEI), and 7-10 year -342.89 in millions (UST). Was the government selling at a good price, as part of Operation Twist, and holding the funds to buy longer term bonds later? Or were select investors selling in order to increase their holding in equities?
Even with the obvious selling of the short term bonds, all bond funds ended the day in the green. The F fund was up 0.34% for the day. And uptrends are appearing on some of the charts. Is this a fear response of the ordinary investor, or a harbinger of things to come in the markets?
Even with the obvious selling of the short term bonds, all bond funds ended the day in the green. The F fund was up 0.34% for the day. And uptrends are appearing on some of the charts. Is this a fear response of the ordinary investor, or a harbinger of things to come in the markets?
