30-Year Treasuries Consolidating at Support

Monday, March 29, 2010

Last week saw a strong sell-off in 30-year bonds. Lower demand at the Treasury auctions caused a relatively large spike in yields last Wednesday and further follow-through selling on Thursday. The selling brought bond futures into support at $114.24. Friday and today were lower volatility consolidation days at the low end of the range. This marks the 4th test of support and given the macroeconomic fundamentals, it seems likely that bonds could break down. I am short a small position in TLT but will consider adding upon a break of this support level.

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