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F Fund
- Thread starter The_Technician
- Start date
350zCommTech
Well-known member
Yields are up again today. The F fund should lose a penny.
350zCommTech
Well-known member
I know you meant to say Friday.
That's what his tracker is telling him to do. The key is tomorrow's CPI report. But if you think about it logically, in this current market, if bond yields drop on lower CPI, both bonds and stocks will go up. If his tracker is telling him that bond yields will drop tomorrow, then he probably should have stayed in the I fund. But I think it had to do more with the possibility of the markets sell-off. In that case, he probably should have gone to the G fund because if the markets sell-off tomorrow, it would be because of higher CPI. Which means that bonds would be selling off too.
Did I get that right Ebbnflow?
350zCommTech
Well-known member
Because you asked the question this morning, I knew what you meant. make a move on Thursday or make a move for Friday.
As for your question, you will invested in the F fund at the closing price today.
ebbnflow
Ebbchart
I know you meant to say Friday.
That's what his tracker is telling him to do. The key is tomorrow's CPI report. But if you think about it logically, in this current market, if bond yields drop on lower CPI, both bonds and stocks will go up. If his tracker is telling him that bond yields will drop tomorrow, then he probably should have stayed in the I fund. But I think it had to do more with the possibility of the markets sell-off. In that case, he probably should have gone to the G fund because if the markets sell-off tomorrow, it would be because of higher CPI. Which means that bonds would be selling off too.
Did I get that right Ebbnflow?
Hopefully, it doesn't happen that way. Better for me would be a "buy the rumor, sell the news" scenario. A sell-off in stocks, but bonds get to recover.
350zCommTech
Well-known member
Hopefully, it doesn't happen that way. Better for me would be a "buy the rumor, sell the news" scenario. A sell-off in stocks, but bonds get to recover.
I hope the CPI comes in low so that we both make money tomorrow.
350zCommTech
Well-known member
I hope the CPI comes in low so that we both make money tomorrow.
Amen, I can live with that.
It looks we'll both get what we want.
ebbnflow
Ebbchart
It looks we'll both get what we want.
Yep, you scored the touchdown and I end up being the waterboy. I always wanted to be the waterboy! :suspicious:
vectorman
Active member
What may have caused the rates to go crazy today...
Bank Reserve Settlement
Definition
A two-week period that ends every other Wednesday during which commercial banks must meet reserve requirements stipulated by the Federal Reserve.
Why Do Investors Care?
Sometimes banks are scrambling to meet their required reserve amount on Wednesday. If banks are having problems meeting reserve requirements, the federal funds rate market will feel the brunt of it since the federal funds rate is the rate which banks charge each other for the use of overnight funds. Usually, small regional banks have more than ample funds, while large money center banks are the ones in need of the funds because they loan their funds more extensively. Most of the time, small regional banks will lend overnight funds to large money center banks. When there is little liquidity in the banking system, the federal funds rate can shoot up sharply on a Wednesday because the money center banks are willing to pay whatever it takes in order that their reserves are meeting the Fed's requirements.
Oddly enough, liquidity trends can change over the course of the day. It isn't unusual to see the fed funds rate shoot up early in the day, but drop just as much near the end of the day. Consequently, since many short term rates are tied to the fed funds rate, short-term dated instruments such as 7-day CDs or even 30 and 60 day CDs can see their rates vary sharply on bank reserve settlement Wednesday.
Incidentally, not having funds to meet reserve requirements is usually not the sign of a bank in financial trouble. However, it is a sign of poor reserve management on the part of the bank since it covers prior week's reserves.
Bank Reserve Settlement
Definition
A two-week period that ends every other Wednesday during which commercial banks must meet reserve requirements stipulated by the Federal Reserve.
Why Do Investors Care?
Sometimes banks are scrambling to meet their required reserve amount on Wednesday. If banks are having problems meeting reserve requirements, the federal funds rate market will feel the brunt of it since the federal funds rate is the rate which banks charge each other for the use of overnight funds. Usually, small regional banks have more than ample funds, while large money center banks are the ones in need of the funds because they loan their funds more extensively. Most of the time, small regional banks will lend overnight funds to large money center banks. When there is little liquidity in the banking system, the federal funds rate can shoot up sharply on a Wednesday because the money center banks are willing to pay whatever it takes in order that their reserves are meeting the Fed's requirements.
Oddly enough, liquidity trends can change over the course of the day. It isn't unusual to see the fed funds rate shoot up early in the day, but drop just as much near the end of the day. Consequently, since many short term rates are tied to the fed funds rate, short-term dated instruments such as 7-day CDs or even 30 and 60 day CDs can see their rates vary sharply on bank reserve settlement Wednesday.
Incidentally, not having funds to meet reserve requirements is usually not the sign of a bank in financial trouble. However, it is a sign of poor reserve management on the part of the bank since it covers prior week's reserves.
robo
Well-known member
Bonds Continue To Weaken
by Carl Swenlin
On our first chart, a daily bar chart, we can see that bonds have been weakening for several months, with the most dramatic decline occurring in the last month or so. The question that comes to mind is whether this weakness is a correction in a longer-term up trend or the start of a more serious decline? Since the 50-EMA is below the 200-EMA, we have to assume that bonds have entered a long-term down trend. This situation could change fairly quickly, but for now we need to maintain negative assumptions.
Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics and strategy if conditions change.
http://www.decisionpoint.com/ChartSpotliteFiles/070622_bonds.html
Short-term trading I'm still playing the F Fund in TSP. ( 20% moves normally) Might add some next week. Currently 100% G Fund. Two TA's I follow have a buy on Bonds for now.
Robo
by Carl Swenlin
On our first chart, a daily bar chart, we can see that bonds have been weakening for several months, with the most dramatic decline occurring in the last month or so. The question that comes to mind is whether this weakness is a correction in a longer-term up trend or the start of a more serious decline? Since the 50-EMA is below the 200-EMA, we have to assume that bonds have entered a long-term down trend. This situation could change fairly quickly, but for now we need to maintain negative assumptions.
Technical analysis is a windsock, not a crystal ball. Be prepared to adjust your tactics and strategy if conditions change.
http://www.decisionpoint.com/ChartSpotliteFiles/070622_bonds.html
Short-term trading I'm still playing the F Fund in TSP. ( 20% moves normally) Might add some next week. Currently 100% G Fund. Two TA's I follow have a buy on Bonds for now.
Robo
FUTURESTRADER
Active member
$TNX touched 5.00%
350zCommTech
Well-known member
Big jump today. It's now at 5.144. It could be a 5 cent loss in the F fund. Big moves like this are scary. IMHO, this has nothing to do with inflation or the Fed since they weren't that hawkish in their announcement last week. I wonder if China is dumping our bonds again. Or it could be something worst...
I'm amazed at how the market is holding up in the face of all this. If yields move up again tomorrow on non-farm payroll, we might finally see some selling in the market.
350zCommTech
Well-known member
What flight to safety? Yields were up on Tuesday and so was the market. This move was too big for that.
As for today's economic data, the ISM was only up a tad and the ADP report doesn't usually cause this kind of a move. The governments' jobs number is the big market mover. Although, the jobs numbers could have been leaked and bond traders are getting a head start.
