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fire sale on bonds
Old 02-08-2008, 03:28 AM   #1
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fire sale on bonds

what a historical day in bond trading. what if they threw a war and no one came. well that was the theme yesterday. it was almost a boycott of the treasury 30 year auction. investors bid rates up to unprecedented levels from where they started at an auction before they were willing to buy..

i just happened to look at TLT and saw it down 2.76%. i thought my eyes were deceiving me.

i couldnt type fast enough to enter my order. bought all ranges of treasury bond etf's . bought tlt tip ief iei . im ready for the next flight to quality again. this makes the 9th time this year i hope to sell these funds again for a quck profit. like clock work they have been rising 1 to 2% on the days we drop big and i sell , and then they sell off again over the next few recovery days but yesterday was an amazing drop.
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Old 02-08-2008, 04:14 AM   #2
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Unprecedented levels? The 10-year hit 3.8% that day. It hasn't been that high since .... err, last month.

What was unprecendented was the *low* yield hit about a week ago. The 10-year went below 3.3%. We haven't seen that since 1958!

So you better pray for another flight to quality. You just locked yourself into a historically low yield....
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Old 02-08-2008, 04:16 AM   #3
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there has never been an almost 3% swing in price at an auction before.

the 30 year required an adjustment in price of almost 3% before buyers came in. we arent talking a 3% yield change but a 3% capital gain change


i trade this almost every few days in this enviornment. its all about capital gain right now ,forget the low yield.

im up about 16% plus the interest so far by simply buying these and recycling them over and over.
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Old 02-08-2008, 04:19 AM   #4
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The swing was high because the treasury is issuing a lot of debt that nobody wants to buy.

That doesn't make it a bargain. You may get lucky, but the reason people aren't buying is because the yield is so low.
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Old 02-08-2008, 04:21 AM   #5
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yep , you got to be crazy to buy them for anyother reason then to sell on those flight to quality days which we keep having lately over and over.. trying to hold these bad boys is almost a sure loss after taxes and inflation
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Old 02-08-2008, 08:04 AM   #6
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Old 02-09-2008, 04:17 AM   #7
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well tlt and tip gone again. sold both following day as bonds rallyed again. whats nice is because it takes a few days to clear an etf like a stock you get the capital gains plus almost a weeks interest. so far this year up 17.25% after yesterday. now ill wait for the next drop again.

yeah im a dirty lil market timer but bonds right now are all about timing the market not time in the market.
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