The trend in bonds was bullish for a long time, and one can see how bonds ran up during that time frame. Currently, its neutral and that also has to be viewed through a bullish lens as it should have turned negative given the run-up. Bonds need to close on a weekly basis above 160.00 relatively soon. In fact, there is a good chance that if the next run up fails to take out the August highs of 161-23, bonds will be paving the way for a move down to the 152.00 ranges and then 147-148 ranges. Traders willing to take on a bit of a risk could consider opening long positions at both levels. Some funds could be deployed at 152 or better and some at 148 or better.
U.S. 30-Year Bond:
Bonds traded as low as 151-12, fulfilling the first requirement; the next stage calls for a rally that could take bonds to as high as 155. After that, bonds are expected to trade below 151-12 and as low as 147 before a tradable bottom takes shape. For now, the bond market is catering to the twaddle that the Fed is going to embark on a rate hiking program.
Copper's breakdown already is a sign that the illusory economic recovery is falling apart. If the Fed wants to embark on the perfect scam, it will stabilize copper to give the illusion that all is well. Who knows – it might still do this. For now, we believe that even if the Fed does raise rates, it will not be part of a new trend; the goal is to come out with another stimulus program.
Despite the current pullback, bonds are still rather overbought, so there is room for bonds to drop even lower, but this is not the end of the world as Bill Gross has been stating for some time. Look at the bombastic titles of some of his articles. Bonds will experience a very strong pullback one day, but waiting for that day could be disastrous.
Bill Gross: Capitalism 'can't survive' at 0% rates
Well, it’s doing a pretty good job so far of surviving so far.
Gross Says 100% Certain of December Rate Hike as Jobs Surge
Maybe and then maybe not, but it won’t mark the end of the world. All the naysayers eventually died, and the world continued without their insane ramblings.
The only time something has a chance of being great is if it's not known by many. As he is famous, anything he states is broadcasted all over the place. However, if it was the short of a lifetime then why inform everyone; why not keep it to yourself and your clients. Remember you can be right and still end up broke. The question comes down to time. Do you have the staying power or time on this planet to bet on something because your guts tell you that it's the right thing to do?
Bull market 'supercycle' for stocks, bonds ending: Bill Gross
Gross, the manager of the $1.5 billion Janus Global Unconstrained Bond Fund, has made similar warnings on stocks and bonds before and acknowledged they've come too early.
In May 2013, Gross, who at the time was manager of the Pimco Total Return Fund, the world's largest bond fund, jolted Wall Street participants on social media with a Twitter post saying: "The secular 30-yr bull market in bonds likely ended 4/29/2013."
"I merely have a sense of an ending, a secular bull market ending with a whimper, not a bang. But if so, like death, only the timing is in doubt," Gross said.
Yes death is a certainty, and only the timing is in doubt, but when you die, timing matters not. Bottom line: never fall for the line that the world is going to end. The only time you start to make plans for a massive correction is when the Crowd has turned ecstatic, and this is not the case. People are turning to bonds out of desperation; that is a far cry from euphoria.