For broad directional moves and at the truly big jumps in the equity market the 30 Year has moved as one would expect, that is in the opposite direction. This makes sense. Typically, as money flows out of the stock market and prices slump money flows into the bond market and bids bond prices up--or bids yields down, same thing. Unfortunately I could not figure out how to plot the 30 Year yield on this graph b/c it would have shown the same direction of movement as the S&P--i.e. as stock prices increase yields increase (b/c bond prices decrease) and vice-versa--and therefore the chart would have been a little easier to read.
However, after intial widening today the 30 Year is coming back in (meaning yields decrease and prices increase--sorry for the lingo) while the S&P continues to rally. I hope the 30 Year is the
one that's right b/c I'm long both it and VXX.
Friday, September 3, 2010
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