The Bond Dream Room

Discussion of the Bond portion of the Permanent Portfolio

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dualstow
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Re: The Bond Dream Room

Post by dualstow » Thu Feb 07, 2019 10:06 am

The next Fed move may be an interest rate cut. Interesting.
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Vanguard auction is open for 2-year notes, 1-year bills -
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Re: The Bond Dream Room

Post by pmward » Thu Feb 07, 2019 10:48 am

Yeah there are a lot of people betting on a cut right now, which is why yields have fallen so sharply over the last few weeks. We will see. Powell was against being so aggressive on both quantitative easing and low interest rates a few years back, it would be very surprising to see him be the one to continue back down that path. But anything could happen. Personally, I have enjoyed getting some actual noticeable interest off of money markets.
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Re: The Bond Dream Room

Post by dualstow » Thu Feb 07, 2019 11:49 am

Oh, me too.
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Wed Mar 27, 2019 6:47 pm

OMG bonds are on fire. I'm looking at the chart for SCHR, which is a 5 year bond ETF. Oversold on a daily and weekly basis, it looks like a bubble to me. I think it's time to take some profits, like tomorrow.
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Re: The Bond Dream Room

Post by pmward » Wed Mar 27, 2019 6:59 pm

I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
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ochotona
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Re: The Bond Dream Room

Post by ochotona » Wed Mar 27, 2019 8:14 pm

pmward wrote:
Wed Mar 27, 2019 6:59 pm
I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
Thanks, I set an alarm to go off when a tight trailing stop is violated. Also have 15 20 30 day moving average alarms. And I put in a price point by hand. I have US Treasuries, so I have to sell them by hand. SCHR is a proxy I am using for the alarms.

Do you think when the bond trend breaks it could also mean the point when stocks start heading higher? Might be nice to sell bonds / buy stocks based on the same signal, when risk-on comes back.
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Re: The Bond Dream Room

Post by pmward » Wed Mar 27, 2019 9:34 pm

ochotona wrote:
Wed Mar 27, 2019 8:14 pm
pmward wrote:
Wed Mar 27, 2019 6:59 pm
I don't think having a few big up days constitutes a bubble. Especially since stocks and gold look like they both want to pull back. Bonds are over bought in the short term, and TLT has a big open gap that is likely to get closed at some point, but that doesn't mean they won't continue up especially in the medium to long term. They just put in a higher low, and a fresh new higher high; the very definition of a brand new up trend. Don't take profits until it breaks trend. At least use a stop loss or a trailing stop if you're wanting to try to actively take some profits early instead of just blindly selling into the start of a fresh new uptrend. Let the winner have a little room to run imo.
Thanks, I set an alarm to go off when a tight trailing stop is violated. Also have 15 20 30 day moving average alarms. And I put in a price point by hand. I have US Treasuries, so I have to sell them by hand. SCHR is a proxy I am using for the alarms.

Do you think when the bond trend breaks it could also mean the point when stocks start heading higher? Might be nice to sell bonds / buy stocks based on the same signal, when risk-on comes back.
These markets are very hard to read right now. Every day is throwing different signals, and the intra-day price swings lately have been very unsure; lots of reversal days. So it's hard to say. The bond market is the only market that is trending right now. I would have a hard time making a large stock purchase right now. Even if we finally break the 2820 resistance level, last January's highs of ~2870, and the all time highs of 2940 are both so close, there's just so much overhead resistance. I have a hard time believing we will break through all of them without some kind of catalyst. But anything could happen and I could be wrong, the markets are rarely, if ever, rational. I also see bearishness being the popular view these days, which is actually leading me to think we might have one more gravity defying blow off top left in the tank. Market tops happen at the point of peak bullishness, and I just don't see that right now. So it has me starting to second guess my own bearishness, at least in the near term.

Now you're seeing how stressful it is to try to market time. This was why I stopped and decided to convert to a buy and hold GB. It's harder to decide to get back in than it is to decide to get out. My life is so much less stressful now. If I feel very strongly about getting out of the market in the future, I'll keep those bets to the 20% small cap allocation (VP) of my GB and keep the 80% that's in my PP in place so I don't shoot myself in the foot if I'm wrong. I think Harry had a lot of wisdom in having a separate PP that is always invested, and a separate VP that you can play, speculate, trend follow, or whatever with.
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Re: The Bond Dream Room

Post by ochotona » Thu Mar 28, 2019 10:34 am

It's the 3-5 year bonds that are on fire now. Glad I looked. I'll keep 0-2 years, keep 6+, and think about selling in the middle.
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Re: The Bond Dream Room

Post by ochotona » Thu Apr 18, 2019 6:39 pm

ochotona wrote:
Thu Mar 28, 2019 10:34 am
It's the 3-5 year bonds that are on fire now. Glad I looked. I'll keep 0-2 years, keep 6+, and think about selling in the middle.
Yesterday the Schwab Bond Lady Kathy Jones recommended 2 yr / 7 yr barbell... sell the 5 yr. Great minds think alike, I guess. I sold SCHR (5), and bought SCHO (2) and IEF (7.5) (now fee-free at Schwab... yahoo!)
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