Bond Bear Rush Coming?

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The benchmark SP 500 is now only 3.1 percent below its record high reached in October 2007. Stocks are further getting a big boost today from two key pieces of data: A narrowing US trade deficit combined with very positive earnings from social business networking kingpin, LinkedIn. LinkedIn shares jumped 18.45% this morning on above consensus revenue and earnings. The MAR13 emini SP futures are trading up to new 2013 highs today at +8pts, or +.55%. We continue to hold our belief that the market’s rally is not over by any means, and our next upside target is 1530. We believe this level will be hit before the summer. Many analysts are now saying the market is fairly valued, but we think differently, we think like traders, not analysts. We believe in following a trend, regardless of what the market is “supposed” to be doing. Therefore we believe the SP 500 will continue to rally.

A huge story in the commodities markets is in the energy markets, mainly Heating Oil. Due to the Nor’Easter storms, heating oil prices are exploded for multiple days in a row, and now are up another $.055 today, trading at $3.255 (MAR13 contract). Our first upside target for this market is $3.40. RBOB Gasoline prices are also continuing to show strength today, trading up $.055 at $3.05 (MAR13 contract). Crude oil is up $.62 at $96.45. We believe the next $5 move in crude oil will be down as the market seems to have ample supplies. As always, any type of geo-political events or increased tension could make crude oil rally quickly.

We focus more on the US 30yr bond market today. We have been writing about our bearish views of this market, and we still hold those views. With the stock market rallying to new 2013 highs today, we believe a sharp move down in bond prices will occur soon. Our next major support level for the 30yr bond futures is at 135. This month, this market broke a significant trendline connecting previous tops. It is also trading well below our first key resistance level of 145. With a narrowing trade deficit, a more upbeat Euro region outlook, combined with solid non farm payrolls reports recently, we believe the 30yr will indeed approach 135. 

30YR Bond chart

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Lido Isle Advisors is an elite provider of futures and options brokerage and Mobile Trade Alerts signals. The leadership of Lido Isle Advisors has been featured on CNBC, Bloomberg TV and referenced in leading publications such as Financial Times, Forbes, Wall Street Journal, Reuters, Benzinga, Futuresmag, & Marketwatch for their expertise on the futures and commodities markets.