The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments


Subject:  Re: A Market Top for Bonds? Date:  5/8/2013  6:01 PM
Author:  globalist2013 Number:  34905 of 35930


Prices for key bond instruments create confusing charts. Every time I look at one I have to remind myself, “Interes -rates are the inverse of price. So ‘up’ is ‘down’.” Here’s an example of what I mean.^TNX+Interactive#symbol=^...

ARRGH! Let’s see. Last August’s low of 1.40 in yield had to also be the nearby high in prices for whatever price the 10-year contract was trading for at that time. So let’s pull a 6-month chart for ZN. Opps, no can do, because the relevant contract expired Sept ’12, or at least, I can’t do it through my account at IB, and to pull historical data at CME requires a subscription. OK, so it’s back to charts based on yield, instead of the price of the underlying. But the conclusion is the same. We’re long past a high in that market. Now, let’s ask “Why?” Why did yields -- and therefore prices -- reverse at Support/Resistance? Why did the yield on the 10-year fail to penetrate the 1.60 support level and go on to retest t