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Posted 1-27-05

20 Year History of Bull Moves in Treasury Bonds

Aside from feeling I have a decent understanding of what moves the Bond market, I like the Bonds simply because they do move. In fact, in any given year, they generally move a lot. What follows is, more or less, a year by year chart history of all the bull moves/bull markets in Bonds going back to 1985.

You will probably be surprised at how many years have had significant up moves, as well as how many years seem to have several 8-10 point bull moves ($8,000 to $10,000 per futures contract), or more, in the course of that year.

I have been in this business since 1980 and have followed the interest rate market almost from the day I started, meaning I have watched and listened and traded through many of the bull markets shown here. There have been different factors driving all of them, but all of them, to me, have had one major aspect in common: NOBODY ever believes they are going up, that is, until they are just about finished doing so. By "nobody", I refer to the economic/banking/brokerage house/analytic community who produce the opinion which filters down to you on the street. The reasons for Bonds not to go up were seemingly always the same, and always seemed quite logical, but, in the end, always seemed to be wrong.....Listed below are all the current major reasons (all of which I have heard before) being given for why Bonds prices are not going higher from here....From my standpoint, I just point out that all of these "bearish" reasons have been loudly touted for the past year, but Bonds are still trading on their highs as we get started in 2005. I think they are going much higher, and sooner rather than later.

1. The budget deficit.
2. Inflation is coming back.
3. The economy is strengthening.
4. The dollar is weak.
5. Energy prices are strong.
6. The Fed is raising short term rates.

Obviously there have been Bear moves/Bear markets in Bonds during the past 20 years. This research only deals with what the up moves in Bonds have looked like, how big they have been and how fast they have moved. The final chart is of Bonds as they look today....You might compare the current market to how many of the bull moves looked over the past twenty years.

Some of these charts will have different scales, but on all of them, each 1 point move = $1000 per futures contract.....

bonds1985-1986bullmarket.gif (10120 bytes)

bonds1987-1988bullmarket.gif (7818 bytes)

bonds1989bullmarket.gif (7585 bytes)

bonds1990bullmarket.gif (7344 bytes)

bonds1991bullmarket.gif (8860 bytes)

bonds1992bullmarket.gif (9036 bytes)

bonds1993bullmarket.gif (9803 bytes)

Bonds1995bullmarket.gif (11530 bytes)

bonds1996bullmarket.gif (7100 bytes)

bonds1997-1998bullmarket.gif (11664 bytes)

bonds2000bullmarket.gif (10783 bytes)

bonds2001bullmarket.gif (8534 bytes)

bonds2002-2003bullmarket.gif (12841 bytes)

bonds2004 bullmarket.gif (6442 bytes)

The next chart is the current Treasury Bond Futures market....I believe this is the perfect set-up to use the Both Sides Strategy, owning units of two calls to every put. I think the next run is at least up 7-10 points from here.

1-27-05spotbondsdaily.gif (12805 bytes)

Give me a call if you want to know more....As I said, THEY DO MOVE....And I believe the best time to trade any market is when it has been doing "nothing" for a long the last 5 months in Bonds.

For a lengthier discussion as to why I am bullish the bond market, click here to see our January 5th newsletter.

Bill Rhyne


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