The Big Hedging is Coming; Bonds and VIX looking Bullish
The market lately has been very unstable to say the least and has been willing to jump onto any boat it can in order to avoid inflation, However the price action we are seeing on the 30 YR seems to indicate that Inflation fears are overblown and that the Value if the Dollar index will likely remain stable.
While looking through the charts i noticed that there was an unusually high correlation between the 30YR Bonds and the VIX: Starting March 3rd 2014 as marked by the green vertical line on both charts. You can see that most Green Months in the 30 YR results in a Green Month in The VIX. I assume this is because many investors buy bonds in times of market uncertainty as a hedge against potential downturns in the value of equities and securities.
Todays Surge in Treasury Bonds could signal: A rise in Volatility to come, A downturn in the Stock market, and a Rise in both the Value and Confidence in the US Dollar.
While looking through the charts i noticed that there was an unusually high correlation between the 30YR Bonds and the VIX: Starting March 3rd 2014 as marked by the green vertical line on both charts. You can see that most Green Months in the 30 YR results in a Green Month in The VIX. I assume this is because many investors buy bonds in times of market uncertainty as a hedge against potential downturns in the value of equities and securities.
Todays Surge in Treasury Bonds could signal: A rise in Volatility to come, A downturn in the Stock market, and a Rise in both the Value and Confidence in the US Dollar.
