The 30 year Treasury yield hit 5.44% on Thursday. That’s its highest level since 2004.
I’m buying bonds right into it.
I’m short bond futures puts at the 104, 103, and 102 strikes. I also bought bonds outright.
I see an opportunity few traders get in a generation. I’m also ready for some near term pain.
If the 30 year yield climbs to 6.5%, bonds could drop another 10 to 13 points. I’ll load up more if that happens.
The stock market gives me another reason to want bonds. A handful of names hold the S&P 500 together, and I expect a wicked rotation back into bonds when they crack.
Here’s what I break down in this weekend’s video:
- Only 45% of S&P 500 stocks traded above their 200 day moving averages on September 24th. A month earlier, 70.57% did.
- Just 25.44% sat above their 50 day moving averages, down from 58% a month earlier. Participation more than halved in 30 days.
- Meta, Microsoft, AMD, Intel, Micron, and Apple are holding the entire index together.
- The 10 year yield hit 5.2% today after sitting at 5.1% two days ago. TLT made a two standard deviation move below its expected move this week.
- The SPX priced a $98 move this week and landed $98 higher to the penny. Next week prices $108, and I’m taking the over.
