The Great Bond Rally of 2011

This rally in Bonds has been quite a spectacle.  It’s amazing how quickly a financial instrument can move when lack of confidence takes over and logic is thrown out the window. 

Bonds rallied hard today, putting in a high at 139’27 after the FOMC Announcement…

This rally took Bonds to a level that is not often reached.  Check out the four year chart of /ZB to see just how high we are in Bonds, and just how quickly we got there.

This area historically results in strong sell side interest so there’s a very good chance this rally in Bonds is coming to an end. 

The recent rally in Bonds is the definition of parabolic move.  It’s going to end soon, and it’s going to be ugly for anyone newcomers to the Long Bonds crew. If we were lucky enough to be long, we would most definitely be taking profits right now.