2010年2月22日星期一

Bond, yield and Stock relationship

1. Watch out iShares Lehman 20+ Year Treas Bond Price (TLT), ISHARESLEHMAN 7-10YR(IEF) and 10 years bond yield ($TNX) movement closely.

Bond Price (tlt) goes up, yield (tnx) goes down. Bond price (tlt) goes down, yield (tnx) goes up.

When bond price goes down, the money flows to the stock market. When bond price goes up, the money flows to the bond market.

Most of time,
Good bond bad dollar.? means that dollar is up, market is down.
Bad bond good dollar.? means that dollar is down, market is up.

For bond auction, the result is not important, it will be bad anyway. The process is important, from 12PM to 1PM, they will wrap up bond auction. They will keep DXY at a good level at bond auction..

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