Forgot I had a short Jan 125/128 call spread order working on the 30 year UST or the ZB. I just got filled at "16 credit. I am very bearish on treasuries in the longer term and bonds in general because of:
1) Higher risk premiums to hold debt due to sovereign concerns, municipality concerns etc etc
2) Excessive money printing by the Fed ie feeding inflation fears as economic data improves
3) Money rotating out of bonds and into equities which are still cheap in comparison
I am looking to be a seller of every UST rally going forward but will swing trade it over the longer term timeframe. ie I will be looking to cover my short call spreads when we hit levels where I think price will bottom temporarily. For this trade that will be at 119'10.
The only thing I fear for this trade is the "flight to safety" trade if we get some repeat of the flash crash and everyone runs to buy the safest and most liquid assets out there which is still USTs but even that will diminish over time as the US deficit grows and it's credit rating may subjected to a downgraded.
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