F Fund

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tsptalk said:
It looks like bonds did recover all day along with stocks. We may be lucky and get a flat day on the F fund even after this morning's sell-off.

bonds3.gif
Click to expand...

Even....amazing:)
 
TSP may be trying to keep F fund timers on their toes like they do to the I fund, but it's also a case of prior day partial penny gains and losses being added to or taken away to the current day.

Today bond yields are up (prices down) yet the AGG is up. I can't explain that one.
 
The Fed's inflationary talk spooks the bond market. Stocks don't seem to care.
 
Checkout the big picture of the 10 yr T. Will it start to break up or down? Something big should happen soon to help establish a new trend. Investors playing the 2yr T are shorting in a big way, betting that yields will go up. (Any contrarian investors among us? Is this the Smart money or the bond herd?)

" Bernanke Spurs Record Bets Against Two-Year Notes (Update1)

By Elizabeth Stanton

May 14 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke's inflation concerns have prompted investors to make a record bet against $88.8 billion of two-year Treasuries.

That's the amount of futures contracts on notes traders have sold at the Chicago Board of Trade, the most since the Commodity Futures and Trading Commission began keeping track of the data in 1993. It exceeds wagers to profit from rising prices by $51.8 billion, the largest so-called net short position ever, according to CFTC data released May 11.

Speculation on a decline in the short-term Treasury notes has more than doubled in the past two months as the economy weathers the worst housing slump in a decade and Fed officials signal they have no intention of cutting their target rate for overnight loans between banks anytime soon. Two-year notes are more sensitive to changes in interest rates than longer-term debt.

``The rate cuts that people have been expecting in earnest late last year and early this year have slowly been priced out,'' said Brian Carlin, head of fixed-income trading in New York at JPMorgan Private Bank, which oversees $100 billion. He has clients betting against two-year notes.

The growth shows how much sentiment has shifted among traders, who were convinced the housing slowdown would prompt the central bank to cut rates to 4.5 percent from 5.25 percent this year as recently as March. Options contracts based on the target rate now show traders are anticipating one quarter-point reduction........


Sweet Spot

The futures bet on a rise in two-year yields is a sign that many investors are ``skeptical we are going to see such aggressive rate cutting over the coming year,'' said Ciaran O'Hagan, a strategist at Societe Generale in Paris.

The price of the two-year note futures contract expiring in June closed May 11 at 102 4/32, down 10/32 from March 30, producing a gain for traders who had sold it.

There were 6.4 million Treasury contracts outstanding at the end of April, up 80 percent since the end of 2005. Two-year contracts increased the most, nearly tripling to 1.1 million.

``The two-year area is to me the sweet spot of the curve right now,'' said Robert Corvino, vice chairman of the Chicago Board of Trade and an independent trader of Treasury futures since 1984. ``It is going to be most sensitive to a Fed move or non-move,'' said Corvino, who specializes in the two-year contract.

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net "



http://www.bloomberg.com/apps/news?pid=20601009&sid=auZK5iV01WrA&refer=bond



http://finance.yahoo.com/q/bc?s=^TNX&t=my&l=on&z=m&q=l&c=
 
All of sentimentrader.com's bond sentiment data is based on the 30-yr and they are showing mixed results. Some overly bullish, some overly bearish and some neutral. Not much help there.
 
Just looking at $TNX, the F fund is primed. Tomorrow's housing news could be the trigger. I'm going to seriously the F fund for tomorow.
 
350zCommTech said:
Just looking at $TNX, the F fund is primed. Tomorrow's housing news could be the trigger. I'm going to seriously the F fund for tomorow.
Click to expand...

F fund is range bound with the AGG resting on support and the 10yr T against resistence. The play recently had been to buy with the 10y T above 4.70 and sell when they get near 4.60. With CPI out of the way, the next big news will deal with housing. I concur with you that this may be one of the few times where alittle money can be put into the F fund for a short play. Also if 12% is right about this afternoon going red, there might be a move into defensive bonds ths afternoon until this China situation is taken care of.

http://www.bloomberg.com/apps/news?pid=20601009&sid=afUkqqa03GkU&refer=bond

Treasuries Little Changed on Less-Than-Forecast Price Increase

By Annie Pinkert and Kim-Mai Cutler

May 15 (Bloomberg) -- U.S. Treasuries were little changed after a government report showed April consumer prices increased less than economists forecast.

Yields dipped for the first day in three on speculation that inflation pressures may have peaked, leaving the Federal Reserve room to hold rates steady. Fed policy makers held borrowing costs at 5 1/4 percent for the eighth time at a policy meeting last week, saying inflation remains the ``predominant'' economic risk.

``The numbers were better than what the market was fearing,'' said Theodore Ake, head of U.S. government bond trading in New York at Mizuho Securities USA Inc. ``The Fed's going to be in a box for awhile, and that's going to foster range-trading.''

http://finance.yahoo.com/q/bc?s=^TNX&t=1d&l=on&z=m&q=l&c=

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG
 
350zCommTech said:
Just looking at $TNX, the F fund is primed. Tomorrow's housing news could be the trigger. I'm going to seriously the F fund for tomorow.
Click to expand...
The bond action today is curious. CPI comes in lower than expected, and there are continued signs of a slowdown in the economy, yet bond yields are up again today. :confused:
 
tsptalk said:
The bond action today is curious. CPI comes in lower than expected, and there are continued signs of a slowdown in the economy, yet bond yields are up again today. :confused:
Click to expand...
I was thinking the same thing Tom. There is a better chance that the FED may lower rates and no effect on Bonds? I almost went to the "F" fund for tomorrow but changed my mind when I saw no response from the AGG.:confused: Strange:blink:
 
Bond Ticker...from Yahoo Finance

3:48 pm - Trade Needs Some Motivation : The market did a whole lot of nothing today, inching higher, slipping back, then just pivoting around unchanged even as there was a batch of relevant (although conflicting) data. The session was a wash, with ranges established very early & remaining stubbornly in place all day. The motion in global bonds had some baring on trade, as EuroBonds fell off on inflation worries. The ranges have been unforgiving & the market should be pent-up & poised to bring some drama, although Thurs not the likely day. The curve was also grinding in place, with the 2-10-yr yield spread heading out -2.6. The buck got back some ground with short-covering helping, along with the positive side of the day's data, moving against the yen to the best levels since the late-Feb market upheaval. Gold took a hit as the dollar took a bid with the spot metal now 662.35 (-9.70). Crude got hit as well on lessening supply concerns but had recovered some late in the day heading out at 62.55 (-0.62). Data will have to be well off the mark to get a much going, but one good, solid negative report would likely hit bonds fairly hard. The data due are initial jobless claims, leading indicators & Philly Fed. Ex-Fed-master, newly minted PIMCO mentor, Greenspan speaks at a conference in Atlanta, while Moskow & Bernanke will speak in Chicago.

http://finance.yahoo.com/bonds/market_summary/article/200001/bond_ticker


I found the line ...." The ranges have been unforgiving & the market should be pent-up & poised to bring some drama, although Thurs not the likely day."..interesting.


For those who are into candlesticks. The AGG has held support at 99.75 with buyers in control yesterday. I noticed the last three days is similiar to a pattern in the AGG chart for Mar 9-13, then there was a steady uptrend. At the same time the S&P started to go sideways. Then on Mar 27th, the S&P fell off and the AGG started going sideways working into a steady downtrend, probably as buyers moved back into stocks. The point is, in hindsight you can see a rotation into bonds a week before the big sell off. Anyway, just something else to watch for.;)
 
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The AGG looked pretty bad today, but looking at a wider picture. The low on monday was 99.76; on tuesday the low was 99.75; the AGG opened yesterday at 99.75 and its low was 99.7 but ended up closing at 99.91; and today after a low of 99.67, it ended up closing at 99.74, giving us a long shadow candlestick. In this case, " candlesticks with long lower shadows and short upper shadows indicate that sellers dominated during the session and drove prices lower. However, buyers later resurfaced to bid prices higher by the end of the session and the strong close created a long lower shadow."

Yesterday, we had a long white candlestick body.

" Long white candlesticks show strong buying pressure. The longer the white candlestick is, the further the close is above the open. This indicates that prices advanced significantly from open to close and buyers were aggressive. While long white candlesticks are generally bullish, much depends on their position within the broader technical picture. After extended declines, long white candlesticks can mark a potential turning point or support level. "

http://www.marketwatch.com/tools/qu...&lf=1&lf2=4&lf3=0&type=4&size=1&optstyle=1013

http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_candlesticks
 
I expected to see something like this tonight....


U.S. Notes May Gain as Yields at One-Month High Spur Demand

By Wes Goodman

May 18 (Bloomberg) -- U.S. Treasury notes may rise for the first time in six days on speculation 10-year yields at their highest in a month will attract some investors.

The yield climbed to 4.76 percent yesterday, a level seen only three times in the past three months. Investors from Asia have tended to increase purchases as the yield approached 4.75 percent over the past few days, said Adam MacKillop, a U.S. fixed-income trader at Barclays Capital Japan Ltd. in Tokyo.

``As we get to the cheap end of the recent range, there is a lot of anticipation by dealers of money coming from this region,'' MacKillop said.

The yield on the benchmark 10-year note fell 1 basis point, or 0.01 percentage point, to 4.75 percent at 11:26 a.m. in Singapore, according to bond broker Cantor Fitzgerald LP. The price of the 4.5 percent security due in May 2017 rose 2/32, or 63 cents per $1,000 face amount, to 98 2/32.

Yields, which move in the opposite direction to prices, rose yesterday in New York trading as signs of a strengthening in the economy eroded speculation the Federal Reserve will cut borrowing costs this year. The 10-year yield gained 8 basis points this week, the most since the start of April.

UBS AG, Europe's largest bank by assets, revised its forecast for the Fed and expects the central bank to start a series of rate cuts in August instead of June, according to a research report from the firm today.

UBS, Pimco

Bill Gross, manager of the world's biggest bond fund, said he had made a ``mistake'' in forecasting the central bank would start trimming borrowing costs by now, he said yesterday. Gross, who is chief investment officer at Pacific Investment Management Co. in Newport Beach, California, is sticking to his call that the Fed will lower borrowing costs this year.

Fed Chairman Ben S. Bernanke and his fellow policy makers have held their target for overnight bank lending at 5.25 percent since June, the highest in six years.

Takashi Furui, who helps run Japan's second-biggest bond fund at Daiwa Asset Management Co. in Tokyo, said a slowing in U.S. growth that brought the pace of expansion to the lowest in four years will curb inflation.

Furui started extending the duration of his U.S. holdings in May and plans to do more, predicting the 10-year yield will fall to 4.2 percent by year-end. Duration measures a portfolio's sensitivity to changes in interest rates, and a bigger number indicates a more bullish position.

The U.S. inflation rate, which was 2.3 percent in April as measured by consumer prices excluding food and energy costs, is poised to come down, he said.

``Inflation will fall to 2 percent by the end of this year,'' said Furui, one of the managers for the $14.5 billion Daiwa Global Bond Fund, the biggest in Japan after the Kokusai Global Sovereign Open fund in Tokyo. ``The economy is gradually slowing.''

To contact the reporters on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net ;

Last Updated: May 17, 2007 23:28 EDT


http://www.bloomberg.com/apps/news?pid=20601009&sid=a1TTw38f4ssA&refer=bond
 
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