Let's Talk About F, Babee

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Jan. 22 (Bloomberg) -- OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.

Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4 percent, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data. Members of the Organization of Petroleum Exporting Countries last sold Treasuries for three straight months in June 2003.

Oil producers have surpassed Asian central banks as the largest pool of global savings, accumulating an estimated $500 billion in 2006 alone, according to research by Pacific Investment Management Co. The sales during those three months mark a reversal because OPEC countries have boosted their holdings of U.S. government bonds by 70 percent to $97 billion in the past 17 months, Treasury data show.

``There will be a significant sell-off,'' Joseph Stiglitz, a Nobel laureate and economics professor at Columbia University in New York, said in an interview. ``Medium-term and long-term yields will go up.''

OPEC members are selling Treasuries because crude prices have declined 34 percent from a record high of $78.40 a barrel in July. They are reducing demand for U.S. government bonds at the same time as central banks from China to Romania say they want to reduce holdings of dollar-denominated assets.

Link

http://aheadofthenews.com/
 
The F fund looks likely to lose another penny today. If it does, it will be lower than any time since mid to late November. That would normally argue for an entry point, but the above post points to caution. Perhaps with oil stabilizing, this influence will lessen, but when? Is there any further news on these massive treasury sales that might point one way or another?
 
... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support aroud the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.
 
... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support around the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.
 
fedgolfer said:
... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support aroud the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.
Click to expand...

It came from Wednesday, when yields were slightly up but weren't enough to cause a 1 cent loss. TA wise, the F fund is due for a bounce but IMHO, it's not worth the risk. It's going to take a very bad economic news to cause bond yields to decline significantly to offer a nice gain. A 1 or 2 penny bounce is not worth the risk.
 
fedgolfer said:
... agreed -- why take the risk when the G will pay monday.
Click to expand...


Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?
 
350zCommTech said:
Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?
Click to expand...


http://www.bloomberg.com/apps/news?pid=20601009&sid=aODSMfs9gbH8&refer=bond

If the Fed leaves rates as is, then bonds have already allowed for that. The big upset would be if the Feds raised a quarter point or talk up the inflation concern. Decent data, inflation is still contained, statement will probably be the same as before. Bonds will be looked at as oversold and should recover some, if so, then stocks will like the yield going down and as someone else here said, the dollar will start to weaken again. It also looks like the VIX may bounce lower off some resistence $$$ while all this is going on. But if it does breaks through it should make for a bumpy ride.
 
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The F-fund is on hard times. This is where age and diversification come into play. Where being with TSPTalk and managing your funds will conclude that this is a flat line period of caution. Capital preservation is the mode of operation. We don't have a trend. Bonds have suffered from rising interest rates by the Fed. Remember tsptalk talked about a 50-50 mix some time ago. This will reduce your risk and still keep you in the market. MHO this is not the time to be 100% stocks, unless you can carry high risk. The problem is that without diversification you can, with the 1day IFT suffer a sizeable loss. The F-fund won't give you a big loss, it's just not a profitable fund right now.

http://www.tsptalk.com/mb/showpost.php?p=74340&postcount=21

Regards.....and be careful......Spaf......:)
 
350zCommTech said:
Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?
Click to expand...

I would also be concerned about a gap in the middle of Aug 06 that will eventually have to get filled. But at the end of Dec 06 there is a gap that I would like to see filled first. :)

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG
 
Bond traders are still trying to decide if they want to commit to buying or not. The fly in the oniment is the revision for Dec 06 that came out this morning. But in the past data becomes weaker moving into the 2nd quarter and so so Feb is here. Point of decision, does the AGG start moving up to fill the gap from end of Dec or down to the fill gap from middle Aug 06? Chart appears to working off some support, and volume recently started picking up.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG
 
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BOND TIMING
2/2/2007


Bond Timing
by Carl Swenlin

Timer Digest has ranked Decision Point #1 Bond Timer for the 52-week period ending 1/26/2007. We were also ranked #3 Bond Timer for the year 2006, and #5 Bond Timer for the last five years. Since past performance does not guarantee future results, this information is not particularly useful, except to highlight that we have done something right in the last year or so. Perhaps it would be more accurate to say that the market has favored our methodology, because sometimes it does not. Rather than focusing on the capture of the elusive prize, I thought it would be useful to describe the methodology we are using.

Nearly two years ago I stopped making discretionary calls for bonds (my best guess for market direction), and decided to use a mechanical model that I call the Trend Model, so named because it is driven strictly by trend-following tools, and relies only on the movement of the price index to generate decisions.

The model uses crossovers of the 20-, 50-, and 200-EMAs (exponential moving averages) of price to generate buy, sell, and neutral signals. The relationship of the 50-EMA to the 200-EMA determines if the price index is in a long-term bull or bear market. For example, it the 50-EMA is above the 200-EMA, it is a bull market.

Crossovers of the 20-EMA and 50-EMA actually generate the signals. If the 20-EMA crosses up through the 50-EMA, a buy signal is generated. When the 20-EMA crosses down through the 50-EMA a sell signal is generated if the 50-EMA is below the 200-EMA, otherwise the model swit

http://www.decisionpoint.com/ChartSpotliteFiles/070202_bonds.html
 
The TA's I follow are still OVERALL Bearish on Bonds and Bullish on stocks. The Top Bond folks I follow are also Bearish on Bonds. Some are Bullish on Bonds, but they are not the ones with the best track records or performance. I'm not talking about trading Bonds as many do here at TSPTALK in the F Fund. I'm talking about longer-term investments. Short-term bonds could be a buy, but these guys have not changed bond postions or recommendations as of the close today. Not many will change postions on short-term recommendations. Carl Swenlin is one of the BEST! Read his comments and look at the data in the article about trend-trading above.


Trading Bonds short-term is the same as trading stocks. It requires the skills that can only be found by watching the top Monkeys. I mean that as a compliment. The proof is in the performance of returns. Here at TSPTALK we also have some of the Top Timers. I keep my eye on them everyday and trade with them on occasion. It's tough taking short-term postions in any Fund! Short-term in the F Fund is really tough. Good trading if you are.
 
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Just an observation. Contrarian view....stocks have been on a tear and many are finally getting the bullish fever after sitting out for awhile waiting for a big correction that hasn't come just yet. Of course the 8% correction last year looks pretty good on the charts. For the record Tom did call the top and bottom, he just cashed in alittle early. Back to bonds...just as more new investors are getting bullish on stocks now, after they had a great several month run. The feeling for bonds is very bearish and alot of people were sellers when they thought the Feds might raise rates. Now some want to buy back their position. So now that the Feds have left rates unchanged and probably leave them at 5.25% for awhile. What will bonds do in the short term? Looking at the 10yr treasury note yield chart for the last several years, the yields usually start dropping some in Dec into Feb. It just hasn't started yet in 07. So in light of the Fed comments; the lower than expected job number 111,000 ; lower construction spending -.4%; unemployment rate 4.6%; ISM Mfg Index 49.3; NAPM-Chicago 48.8; GDP 3.5 ( mostly from debt laden government and consumer spending) ; oil ??? .... bond yields may continue easing in the short term until inflation concerns grab center stage again. Just my guess. We can also watch the 3 or 5 day moving avg.


http://finance.yahoo.com/q/bc?s=^TNX&t=5y&l=on&z=m&q=l&c=

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

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070131/default.htm
 
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