Let's Talk About F, Babee

[GGal]

http://www.tsp.gov/rates/history_2000.html

Compare F returns to (1) Falling Interest Rates (2000-2003), (2)Deepening Recession (2001-2003), and
(3) Oil Prices (what were they doing 2001-2003.....I think they were falling in 2001)

GA

[airlift]

We are in a sort of uncertain spot right now. If I am right, this correction in the stock funds is not finished. Maybe they are being held up a bit by the end-of-month attempt at window dressing. The stock funds are less overbought now. However, some technical indicators like the NYSE and Nasdaq overbought/oversold oscillators appear to have some more downside to go before showing better oversold levels. I am not certain how to play the bond funds. What opinions are out there regarding whether conditions will favor a sustained and better performance by the F fund (AGG) vs. the G fund?

[nnuut]

Looks good for the "F" Monday may add more worries?

BOND REPORT
Treasurys rally after weaker than expected ISM data

By Wanfeng Zhou (http://www.marketwatch.com/news/mailto.asp?x=119+122+104+111+117&y=Wanfeng+Zhou&z=marketwatch.com&guid=%7B00946835-c358-4955-8ee1-f8c0d1e9c3e3%7D&siteid=mktw), MarketWatch
Last Update: 10:40 AM ET Dec 1, 2006




NEW YORK (MarketWatch) - Treasury prices rose sharply Friday, sending the benchmark yield to its lowest level since January, after a report showed factory activity in the United States contracted in November for the first time in more than three years.
The Institute for Supply Management reported Friday that its manufacturing index fell to 49.5% in November from 51.2% in October. The decline was unexpected. The consensus forecast of estimates collected by Marketwatch was for the index to rise to 51.8%. Readings below 50 indicate contraction.
This is the first time the index has been below the 50 threshold since April 2003, said David Ader, government bond strategist at RBS Greenwich Capital. "This is one of the criteria we want to see in order to say the [Federal Reserve] can ease."
The disappointing ISM data come a day after a report showed the Chicago purchasing managers index fell to 49.9% in November from 53.5% in October. Economists were expecting the index to rebound slightly to 54.4%. See full story. (http://www.marketwatch.com/News/Story/chicago-area-business-activity-weakens-sharply/story.aspx?guid=%7B9E610BCE%2DDF67%2D45AE%2DACB1%2 DFA9365DB47BA%7D&siteId=mktw)
[/URL]
Separately, spending on U.S. construction projects dropped by 1.0% in October, as outlays on private residential construction matched a low hit in July 2006, the Commerce Department said. The decline beat the 0.3% drop expected by economists surveyed by MarketWatch.
The federal funds futures showed that the Fed will cut its overnight interest rate target to 5% from 5.25% in the first quarter of 2007. The odds of a cut in March moved to 62% from just under 50% following the ISM release. The Fed has always cut rates when the ISM falls below 50% on a sustained basis. The market is also pricing in small odds of a further cut to 4.75% in May.
Several Federal Reserve officials including Chicago Fed President Michael Moskow and Richmond Fed President Jeffrey Lacker are due to speak later in the session.
[URL]http://www.marketwatch.com/News/Story/Story.aspx?column=Bond+Report&siteid=mktw&dist (http://www.marketwatch.com/tools/quotes/intchart.asp?symb=TNX&siteId=mktw)=

[airlift]

Thanks NNuut.

[350zCommTech]

The Feds are out talking hawkish, trying to save the dollar. Lets hope the bond traders are smart enough to ignore this yak.

[Birchtree]

The F fund has got about as much play room as a tight girdle.

[FUTURESTRADER]

Bill Gross of Pimco Bonds looking for $TNX down to 2.50 - 3.00 next year. Thinks Fed has to cut.

[350zCommTech]

Bill Gross of Pimco Bonds looking for $TNX down to 2.50 - 3.00 next year. Thinks Fed has to cut.

I didn't catch the interview, did he say when they will start cutting? January? March?

[FUTURESTRADER]

I didn't catch the interview, did he say when they will start cutting? January? March?

I missed that most salient point :( , however CNBC now online, live! @ u guessed, it cnbc.com, and here is the interview! :)

http://www.cnbc.com/id/15840232?video=150570210&play=1

[350zCommTech]

I missed that most salient point :( , however CNBC now online, live! @ u guessed, it cnbc.com, and here is the interview! :)

http://www.cnbc.com/id/15840232?video=150570210&play=1

Thanks for the link, but it looks like you have to register to look at it.

[FUTURESTRADER]

Sorry about that, bogus CNBC...What I thought I heard Gross say was that the Fed will have to start changing their rhetoric now to prepare for cuts in 07

[350zCommTech]

Sorry about that, bogus CNBC...What I thought I heard Gross say was that the Fed will have to start changing their rhetoric now to prepare for cuts in 07

I would completely agree with that. The F Fund will definitley do well that day. The big question is how will the market handle the change in rhetoric? A bear would say, "Yup, the Feds are now worry about the economy." A bull would say, " Yup, a cut in interest rates will help stimulate the economy and provide a soft landing."

My personel opinion is that the Feds went to far and will now be too late when they lower rates. A hard landing is coming. But unfortunately, I don't control the market. Right now, the bulls are running the show. And if you look at the previous recession, the market will rally on the initial rate cuts.

[350zCommTech]

Today, bond yields are up across the board but the AGG was only down -.08?:confused:

I was expecting a 2-3 cent loss in the F fund.

[Pilgrim]

I've never figured out how Lehman Brothers does their weighting but today, for example, the ten year bond lost 0.22% of its price while the two year bond lost 0.12%., so 0.08 % is a composite using many different bonds. On top of that, there has always been some flakiness in how the F-fund tracks AGG.

[nnuut]

Today, bond yields are up across the board but the AGG was only down -.08?:confused:

I was expecting a 2-3 cent loss in the F fund.
I love the "F" fund.:mad: Yesterday made .10 and paid nothing must have FV from the day before?:confused: I'm out of the stinkin "F" fund COB today, so stick in there I'm sure it will be up at least 3 cents tomorrow!:sick:

[350zCommTech]

I love the "F" fund.:mad: Yesterday made .10 and paid nothing must have FV from the day before?:confused: I'm out of the stinkin "F" fund COB today, so stick in there I'm sure it will be up at least 3 cents tomorrow!:sick:

That makes sense! It should have paid a penny yesterday, so today it's only down .08 instead of .18. Wow, this is almost like the I fund.:nuts:

[350zCommTech]

Looks like the F fund loss 2 pennies after all. I guess I'll stop using the AGG.

[weatherweenie]

Looks like the F fund loss 2 pennies after all. I guess I'll stop using the AGG.

No EFA, no AGG, what's a boy to use? ;)

[350zCommTech]

No EFA, no AGG, what's a boy to use? ;)

Maybe I'll setup a spreadsheet for the bonds as well.


NOT!:D

[Birchtree]

I only need something that will help me with Bingo. Will these spread sheets help?

[350zCommTech]

I only need something that will help me with Bingo. Will these spread sheets help?

No, I don't think so. These spreadsheets will make you jump around from place to place. I think you are more of a "stationary person".:)

[350zCommTech]

Bond yields were mixed today. Most were unchanged or a hair down. The AGG shows -.09. I'm guesssing(hoping) the F fund will be even today.;)

[350zCommTech]

Not looking good for bonds. Yields are up modestly across the board. I'm guessing a loss of 2-3 cents in th F fund.

[MADDOG]

I'm About Ready To Give Completely Up On The F Fund
I Don't Recall Ever Making Any Money Here

Zeroooooooooooooooooo's
And
Minussssssssssssssssssss

Md

[350zCommTech]

Mr. Paulson's comments are making it wors for the bonds. Maybe a loss of 3-4 cents.

[Fivetears]

Note to self... when making a pass through the F-Pit, try to reach out and grab the G-Penny as you pass. :embarrest:

[robo]

After Friday's data, short-term caution in Bond Funds. We just could have hit, or we are close to a major bottom in long term interest rates.


Take Care!

[SkyPilot]

I hate the F fund...

should never go there...

always use G...

maybe next time I'll remember!

[robo]

I hate the F fund...

should never go there...

always use G...

maybe next time I'll remember!


I also like the G Fund for safety.


The Top Bond Timers are Bullish with 3 Bulls, 1 Bear and 1 Netural. That's enough to keep me cautious on Bonds. After Friday's data will the Fed cut rates in the first quarter of 2007? The Bond Market is now saying maybe not.

[350zCommTech]

I also like the G Fund for safety.


The Top Bond Timers are Bullish with 3 Bulls, 1 Bear and 1 Netural. That's enough to keep me cautious on Bonds. After Friday's data will the Fed cut rates in the first quarter of 2007? The Bond Market is now saying maybe not.

It wasn't just Fridays data. 132k is an ok number not great. It might even get revised down next month. Bond yields were up modestly after data. When the yields are this low, it doesn't take much to cause a sell off. Combine that with Mr. Paulson's comments to Marie about how good a shape the economy is and you have yourself a sell off in bonds.

IMHO, we are not yet at the bottom for long term yields. More bad ECON data will come out. The Feds will have to cut rates. If we get another manufacturing data below 50, there will be no question about it.

[FUTURESTRADER]

I hate the F fund...

should never go there...

always use G...

maybe next time I'll remember!

never say never, sky :) $TNX thru fast stochs was signaling slight momentum to upside on 12/1, confirming strength when fast stochs broke out of oversold on 12/6

[TerpTrader]

Ugly Bearish-Engulfing candle forming today.......(so far).
Gonna bail on that alone. :(

[FUTURESTRADER]

terp....you looking at AGG?

$TNX short term (today) looks higher, longer term (3 days) still trending lower.

[TerpTrader]

terp....you looking at AGG?

$TNX short term (today) looks higher, longer term (3 days) still trending lower.
no....was going by TLT. No bearish candle on AGG, i see.
$TNX has a BULLISH engulfing candle though, so (likely) will go higher.
I forgot whether TLT or AGG is better indicator. I should probly look into that eh? :p

[tsptalk]

FuturesTrader,
$TNX is the yield. Bonds are lower. Are you confusing the two, or am I just butting into a converstion again? :)

[FUTURESTRADER]

FuturesTrader,
$TNX is the yield. Bonds are lower. Are you confusing the two, or am I just butting into a converstion again? :)

yep, you're buttin in..but it's your house, your entitled :) my bad for being vague on that...$tnx is yield, inverse to 10 yr bond price/F fund performance.

I think AGG is better indicator longer term..2/3 days, vs TLT which does seem to be a better intraday indicator..not enough volume on AGG, does about .5 M daily, TLT about 1 M. TLT is 20+ year duration bonds. SHY is 1-3 yrs, AGG is 'AGG'regate

[FUTURESTRADER]

10 yr price look higher?

[vectorman]

Info coming out tomorrow...

Treasury Budget
2:00 ET
http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html

[350zCommTech]

Taking a hit today. down 3 cents right now.

[350zCommTech]

So far, it's down 1 cent.

The near future for the F fund is not looking good. While Today's retails were a little bit above expections, Oct & Nov's were revised down and holiday sales were a little disappointing. With recent Fed speaks and economic data, the bond market appears to have changed their expectations for a rate cut.

[350zCommTech]

Could be a 2 cent loss today.

[Fivetears]

The 20 day Moving Average looks like it wants to become pretty intimate with the 50 MA; only .04 away.
http://stockcharts.com/h-sc/ui?s=AGG&p=D&yr=0&mn=6&dy=0&id=p34075910632

[robo]

Jan. 22 (Bloomberg) -- OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.

Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4 percent, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data. Members of the Organization of Petroleum Exporting Countries last sold Treasuries for three straight months in June 2003.

Oil producers have surpassed Asian central banks as the largest pool of global savings, accumulating an estimated $500 billion in 2006 alone, according to research by Pacific Investment Management Co. The sales during those three months mark a reversal because OPEC countries have boosted their holdings of U.S. government bonds by 70 percent to $97 billion in the past 17 months, Treasury data show.

``There will be a significant sell-off,'' Joseph Stiglitz, a Nobel laureate and economics professor at Columbia University in New York, said in an interview. ``Medium-term and long-term yields will go up.''

OPEC members are selling Treasuries because crude prices have declined 34 percent from a record high of $78.40 a barrel in July. They are reducing demand for U.S. government bonds at the same time as central banks from China to Romania say they want to reduce holdings of dollar-denominated assets.

Link

http://aheadofthenews.com/

[Pilgrim]

The F fund looks likely to lose another penny today. If it does, it will be lower than any time since mid to late November. That would normally argue for an entry point, but the above post points to caution. Perhaps with oil stabilizing, this influence will lessen, but when? Is there any further news on these massive treasury sales that might point one way or another?

[350zCommTech]

Looks like a 2 cent loss so far, but it's getting close to 3 cents.

[Fivetears]

Todays Close - 0.27%Looks like a 2 cent loss so far, but it's getting close to 3 cents.

[fedgolfer]

... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support aroud the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.

[fedgolfer]

... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support around the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.

[350zCommTech]

... i wonder where the F fund picked up the extra loss yesterday beyond the AGG's decline? Anyway, the fallout out of the descending triangle may find support aroud the 100 day MA ($11.07) in the F fund... could fall lower as the market seems to be thinking cash is king.

It came from Wednesday, when yields were slightly up but weren't enough to cause a 1 cent loss. TA wise, the F fund is due for a bounce but IMHO, it's not worth the risk. It's going to take a very bad economic news to cause bond yields to decline significantly to offer a nice gain. A 1 or 2 penny bounce is not worth the risk.

[fedgolfer]

... agreed -- why take the risk when the G will pay monday.

[350zCommTech]

... agreed -- why take the risk when the G will pay monday.


Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?

[vectorman]

Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?


http://www.bloomberg.com/apps/news?pid=20601009&sid=aODSMfs9gbH8&refer=bond

If the Fed leaves rates as is, then bonds have already allowed for that. The big upset would be if the Feds raised a quarter point or talk up the inflation concern. Decent data, inflation is still contained, statement will probably be the same as before. Bonds will be looked at as oversold and should recover some, if so, then stocks will like the yield going down and as someone else here said, the dollar will start to weaken again. It also looks like the VIX may bounce lower off some resistence $$$ while all this is going on. But if it does breaks through it should make for a bumpy ride.

[Spaf]

The F-fund is on hard times. This is where age and diversification come into play. Where being with TSPTalk and managing your funds will conclude that this is a flat line period of caution. Capital preservation is the mode of operation. We don't have a trend. Bonds have suffered from rising interest rates by the Fed. Remember tsptalk talked about a 50-50 mix some time ago. This will reduce your risk and still keep you in the market. MHO this is not the time to be 100% stocks, unless you can carry high risk. The problem is that without diversification you can, with the 1day IFT suffer a sizeable loss. The F-fund won't give you a big loss, it's just not a profitable fund right now.

http://www.tsptalk.com/mb/showpost.php?p=74340&postcount=21

Regards.....and be careful......Spaf......:)

[vectorman]

Bond news....
http://www.bloomberg.com/apps/news?pid=20601009&sid=aKAJKx8_aLSk&refer=bond

[vectorman]

Looks like more pain for the F fund. Down 1 penny so far today. As I've said before, don't trust TA with this fund. It might bounce tomorrow on weak Leading Indicators. If it does bounce tomorrow, it should be sold. On Wednesday, I can see the F fund losing 5 cents or gaining 5 cents. Is it worth the gamble?

I would also be concerned about a gap in the middle of Aug 06 that will eventually have to get filled. But at the end of Dec 06 there is a gap that I would like to see filled first. :)

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

[vectorman]

Bond traders are still trying to decide if they want to commit to buying or not. The fly in the oniment is the revision for Dec 06 that came out this morning. But in the past data becomes weaker moving into the 2nd quarter and so so Feb is here. Point of decision, does the AGG start moving up to fill the gap from end of Dec or down to the fill gap from middle Aug 06? Chart appears to working off some support, and volume recently started picking up.
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

[robo]

BOND TIMING
2/2/2007


Bond Timing
by Carl Swenlin

Timer Digest has ranked Decision Point #1 Bond Timer for the 52-week period ending 1/26/2007. We were also ranked #3 Bond Timer for the year 2006, and #5 Bond Timer for the last five years. Since past performance does not guarantee future results, this information is not particularly useful, except to highlight that we have done something right in the last year or so. Perhaps it would be more accurate to say that the market has favored our methodology, because sometimes it does not. Rather than focusing on the capture of the elusive prize, I thought it would be useful to describe the methodology we are using.

Nearly two years ago I stopped making discretionary calls for bonds (my best guess for market direction), and decided to use a mechanical model that I call the Trend Model, so named because it is driven strictly by trend-following tools, and relies only on the movement of the price index to generate decisions.

The model uses crossovers of the 20-, 50-, and 200-EMAs (exponential moving averages) of price to generate buy, sell, and neutral signals. The relationship of the 50-EMA to the 200-EMA determines if the price index is in a long-term bull or bear market. For example, it the 50-EMA is above the 200-EMA, it is a bull market.

Crossovers of the 20-EMA and 50-EMA actually generate the signals. If the 20-EMA crosses up through the 50-EMA, a buy signal is generated. When the 20-EMA crosses down through the 50-EMA a sell signal is generated if the 50-EMA is below the 200-EMA, otherwise the model swit

http://www.decisionpoint.com/ChartSpotliteFiles/070202_bonds.html

[robo]

The TA's I follow are still OVERALL Bearish on Bonds and Bullish on stocks. The Top Bond folks I follow are also Bearish on Bonds. Some are Bullish on Bonds, but they are not the ones with the best track records or performance. I'm not talking about trading Bonds as many do here at TSPTALK in the F Fund. I'm talking about longer-term investments. Short-term bonds could be a buy, but these guys have not changed bond postions or recommendations as of the close today. Not many will change postions on short-term recommendations. Carl Swenlin is one of the BEST! Read his comments and look at the data in the article about trend-trading above.


Trading Bonds short-term is the same as trading stocks. It requires the skills that can only be found by watching the top Monkeys. I mean that as a compliment. The proof is in the performance of returns. Here at TSPTALK we also have some of the Top Timers. I keep my eye on them everyday and trade with them on occasion. It's tough taking short-term postions in any Fund! Short-term in the F Fund is really tough. Good trading if you are.

[vectorman]

Just an observation. Contrarian view....stocks have been on a tear and many are finally getting the bullish fever after sitting out for awhile waiting for a big correction that hasn't come just yet. Of course the 8% correction last year looks pretty good on the charts. For the record Tom did call the top and bottom, he just cashed in alittle early. Back to bonds...just as more new investors are getting bullish on stocks now, after they had a great several month run. The feeling for bonds is very bearish and alot of people were sellers when they thought the Feds might raise rates. Now some want to buy back their position. So now that the Feds have left rates unchanged and probably leave them at 5.25% for awhile. What will bonds do in the short term? Looking at the 10yr treasury note yield chart for the last several years, the yields usually start dropping some in Dec into Feb. It just hasn't started yet in 07. So in light of the Fed comments; the lower than expected job number 111,000 ; lower construction spending -.4%; unemployment rate 4.6%; ISM Mfg Index 49.3; NAPM-Chicago 48.8; GDP 3.5 ( mostly from debt laden government and consumer spending) ; oil ??? .... bond yields may continue easing in the short term until inflation concerns grab center stage again. Just my guess. We can also watch the 3 or 5 day moving avg.


http://finance.yahoo.com/q/bc?s=%5ETNX&t=5y&l=on&z=m&q=l&c=

http://finance.yahoo.com/q/bc?s=%5ETNX&t=my&l=on&z=m&q=l&c=

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

http://www.federalreserve.gov/boarddocs/press/monetary/2007/20070131/default.htm

[vectorman]

It looks like bonds may build upon a possilbe head and shoulders pattern.
Left shoulder, end of Sept; head would be end of Nov and beginning of Dec; and now, if it is a S&H, start working up on the right shoulder.

http://www.trade10.com/Head_Shoulders.html

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

( 10 yr formation is inverted, like someone upside down) http://finance.yahoo.com/q/bc?s=%5ETNX&t=1y&l=on&z=m&q=l&c=

[FUTURESTRADER]

It looks like bonds may build upon a possilbe head and shoulders pattern.
Left shoulder, end of Sept; head would be end of Nov and beginning of Dec; and now, if it is a S&H, start working up on the right shoulder.

http://www.trade10.com/Head_Shoulders.html

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=AGG

( 10 yr formation is inverted, like someone upside down) http://finance.yahoo.com/q/bc?s=%5ETNX&t=1y&l=on&z=m&q=l&c=

yup, ten yr price slow stochs look higher. I nibbled at F today, took it out of G

[vectorman]

http://www.bloomberg.com/apps/news?pid=20601009&sid=aODSMfs9gbH8&refer=bond

If the Fed leaves rates as is, then bonds have already allowed for that. The big upset would be if the Feds raised a quarter point or talk up the inflation concern. Decent data, inflation is still contained, statement will probably be the same as before. Bonds will be looked at as oversold and should recover some, if so, then stocks will like the yield going down and as someone else here said, the dollar will start to weaken again. It also looks like the VIX may bounce lower off some resistence $$$ while all this is going on. But if it does breaks through it should make for a bumpy ride.

F fund up 9 cents in 6 days...stocks up nice too..$$$

[Brett]

Hey Tom, looks like you and the few other 100% F-fund folks were the only ones to make money today.:D Make sure you rub everyone’s nose in it, in tomorrow’s commentary. Na na-na na na.:p

[SkiUtah]

The day ain't over till the fat lady sings....

[vectorman]

Hey Tom, looks like you and the few other 100% F-fund folks were the only ones to make money today.:D Make sure you rub everyone’s nose in it, in tomorrow’s commentary. Na na-na na na.:p


http://www.bloomberg.com/apps/news?pid=20601009&sid=ahtPrTUk8gEY&refer=bond

[Spaf]

The F-fund.

b-careful, interest rates r in neutral.
[AGG] is a overall a 8% buy, short term a 40% buy, RE: http://quote.barchart.com/texpert.asp?sym=AGG&code=BSTK

For retirement, etc; February is the weakest of the best 6-months (STA).

Regards...and be careful!...Spaf

[vectorman]

The F-fund.

b-careful, interest rates r in neutral.
[AGG] is a overall a 8% buy, short term a 40% buy, RE: http://quote.barchart.com/texpert.asp?sym=AGG&code=BSTK

For retirement, etc; February is the weakest of the best 6-months (STA).

Regards...and be careful!...Spaf

Thanks for the comment Spaf. I did not plan on going long in the F fund, only a short term move while conditions are positive in an up trend. Besides, I got tired of all that pushing and elbowing on the lillypad.:laugh: It was too crowded. I also find that I'm in good company with Sugar and Spice, at least with one of them. Looking around the F fund room, I see Ebbnflow over in the corner looking in some box, with ' My System ' written all over it. He's scratching his head and murmuring something about the week of february 19th to 23rd. :blink:

http://charts3.barchart.com/chart.asp?sym=AGG&pagesource=texpert&data=A&grid=Y&code=BSTK&ov1=064