Getting Long on Long Duration..
US 10-year note futures look primed for significant upside in the coming quarters as rates peak and the global economy rolls over. Weakening China economy already a sign of coming deflation while the lagged effects of rapid rate hikes in the US economy haven't even kicked in yet.
Have a look at the usual signs of a topping business cycle. Highs in homebuilders and consumer discretionary stocks + massive inverted yield curve. You have 110 support on the 10-year going back quite a ways and the last time the COT was this out of whack, it marked a major low in bonds. 5% on 90-day bills (Money Funds) has also traditionally marked a peak in short-term rates.
So 2k of downside vs. 30k+ upside. Excellent, just excellent R/R on this trade. Scaling into longs...
Have a look at the usual signs of a topping business cycle. Highs in homebuilders and consumer discretionary stocks + massive inverted yield curve. You have 110 support on the 10-year going back quite a ways and the last time the COT was this out of whack, it marked a major low in bonds. 5% on 90-day bills (Money Funds) has also traditionally marked a peak in short-term rates.
So 2k of downside vs. 30k+ upside. Excellent, just excellent R/R on this trade. Scaling into longs...
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