Hubert Senters here.
Today, we had the release of the FOMC minutes at 2PM. I’m not a huge news follower. I do pay attention when we have a red dot or a yellow dot. Down here you can see the green, yellow. I mean red and green but not yellow. That means it’s going to be a market mover.
Now, it’s not the FOMC meeting announcement. It’s FOMC notes or minutes after they discuss things. If you’re a big CNBC person you can just go over here and you see fed minutes all signs point to more rate hikes ahead. Really, that’s amazing, I would have never figure that out.
But anyway, I mean obviously interest rates are going to rise it can’t stay this low forever and they’ve already been raising and they’re going to continue to raise them. When that stuff happens what usually takes effect is a cause and effect relationship.
If the interest rates rise which they’re going to the bond market will fall. So let me show you what that looks like. Now, the cool thing about is I don’t think bonds are hard to trade especially — I don’t think anything is hard to trade when you have a massive trading that you can kind of take advantage of.
Well, it gets harder when they’re sloppy and choppy. So in this case on this trade, I was initially risking only $125 — $156.25. I don’t know why I’m confused today.
So then I trailed my stop down into the worst case scenario. If this entire move that happened today where we were $1875, worst case scenario. I won’t lose any money because that will mess with your psychology some if you have a couple of grand in profit and then you go ‘’oh my goodness, I lost $156.’’ Just makes you feel stupid. So worst case scenario if you’re like ‘’well, I would feel stupid if I took $2231.
Well that’s fine. You can always trail your stop tighter if you want to do that. I can’t believe that loose because I want to take advantage of the moves. But let’s take a look at the bond markets so when we look at the charts on a daily chart here.
And there are several different things that you can trade. You can trade ETF, TVT, TLT if you want to do that and I’ll explain how to do that in a future video. But here your major bond markets, OK, so you’ve got the bund — the Euro Bund that was not doing anything today. You have the 2-year note.
Now, obviously the news is coming out like ‘’oh my goodness, we think that they’re going to continue to raise rates.’’ Well, I mean it’s been a sell signal since late September so you would think that interest rates are going to rise.
Bonds have been going lower and that’s the 2-year. Here’s the 5-year also massive downtrend. Easy to trade or I should say easier. Here’s the 10-year note, you can see our targets have been hit and we got another target hit today at $120’2.0. Our next target is $117’13.5.
And then the 30-year is actually a little bit weaker than that and it’s making a new low and it’s going to go substantially lower too, so the next place is probably going to go to this most recent low right there at $142.14 which is only about a half a point lower and then we’re going to have to deal with substantially lower prices.
This is not the end of the bond move. It’s just the beginning of it. It’s going to fall apart and go substantially lower. You really need to learn how to trade these things if you don’t know how.
I am going to be doing a special webinar with Mark Helweg, Friday, February 23rd at 12PM Eastern about his ‘’Simple Hedge Fund Strategy. ‘’ Mark’s magic math will happen this Friday noon.
I am going to hyperlink to this page. Click CLAIM MY SPOT to register for the webinar.
Good luck. Hope it helps and I’ll see you on the next video.
