Thursday, November 21, 2013

BofAML Warns “It’s Time To Be Bearish On US Treasuries”

It’s time to turn bearish on US Treasuries, is the clarion call from BofAML’s Macneil Curry. The impulsive advance in US 10yr yields from 2.669%/2.630% and Tuesday Bearish Engulfing Candles in many of the futures contracts (WN, US & FV), Curry says, means the larger bear trend has resumed. In 10yr yields Curry targets 2.950%/2.992% (the high end of the 4m 2.47%/3.00% area range trade). Pullbacks should be seen as temporary, corrective and an opportunity to go short. This bearish view, he warns, is invalidated on a 10yr yield move below the 2.659% lows of Nov-18. From a trading perspective they express this view by selling USZ3. Downside targets are seen to 128-22/128-12, with a stop above 133-10.
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