market too bearish Treasuries

[juan motime]

When everyone thinks interest rates are headed nowhere but up, the sentiment factor can often be a good contrarian indicator.

In the U.S., recent economic data have been very positive for the economy. However, there is still the 800-pound elephant of jobs and housing.

The March CBOT 10- and 5-year t-note futures are giving technical buy signals, as well as the March 2012 CME Eurodollar which has formed what might be a W bottom.

A good jobs report this Friday could cause the bonds to tank bigtime, but is anyone else thinking that rates might not soar like the majority of people do?

When everyone hates fixed income, that can often be the time to go long.

 

[meanreversion]

I think some of the bears might reconsider if they looked at a 30 year chart of the 10 year T-note.

But hey, picking the top of a bubble is always fun, even more so if you get it right, so people will keep trying.

Having said that, my trend filter for the 10yr is now down, so I'm looking to go short around 118'20 or so.