Tuesday, August 31, 2010

The rising Volatility in the Bond market signals a possible trend change

The Long Bond is trading inside a rising trend channel and bounced off the 13-Day MA Support on the last Friday Option Expiry as Tonbridge AL kindly reminded.
The COT Report however shows a possible change of hands as Commercials and Large Speculators are exchanging their exposure and that is a serious sign of caution. The trend has been strong but it always reaches a point where it bends and the rise in Volatility on last Friday is a sure sign of possible change.


10Y Note has similarly reversed the Friday volatility break but the COT Report here also shows that Commercials as swapping holdings with Large traders and we should remain cautions of the underlying moves.

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