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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (37289)	7/29/2005 9:56:45 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Understand that I'm not calling for big Treasury rallies, and hope Mish knows that. The wild cards are FCBs, they really control US monetary policy, and if you are buying longer maturity, you are placing your trust not just in the Fed (ha, ha), but China, and Japan. I'm saying use 3 month and 6 month for safety, and once in awhile as yield expands, maybe add a small amount of two years, like at the last auction. There is a three year auction on August 9th, and if it's close to 4.1%, I'll even use a little of that. Just creep duration out as rates increase, and if they invert, forget it, just stay short. My folks are well off and older, and I have them on a program of incrementally moving them into bills through Treasury Direct auctions, cleaning out their bank accounts, as I simply don't want them doing what I do, and I want them largely out of US financial institutions. For the record, I think we are more or less range bound on the TNX (for now). 3.80 to 4.50 is the broader range. We spend more time in a narrow range of 4.00 to 4.30. Adding to shorts at the top of those ranges has gotten treasury bears crucified and I see no reason (especially with the FED tightening) for that trend to change. Longer term, in the midst of the housing collapse, I think we see 2.5% on the TNX. But I also think we see a couple spikes up (from where to where I do not know) when the FED first pauses, and then again when they cut. That is pretty much my roadmap. In the intermediate term anyway it seems that Russ and I are more or less in agreement. Mish