Thursday, August 28, 2014

JGBS Inverse Japanese Government Bond Futures Daily Chart

Keystone continues to like the JGBS play which is a very thinly traded inverse Japanese Government Bond Futures ETN. It is a play to hold as an insurance policy in case any bad news hits concerning Japan on any given night. Japan yields remain extremely low the lowest around the world. With notes and bonds as demand rises price rises and yields drop and inversely, as demand falls price falls and yields rise. The JGBS is an inverse to the price. Thus, the chart above drifts ever lower as the Japanese Govt Bond Futures price moves ever higher with yields lower. A long play with JGBS is looking for a rise in Japan yields and corresponding lower price, which will send the chart above higher. Japan's economy is very shaky and may create an event out of left field.

JGBS continues slipping lower into a falling wedge with oversold conditions and positive divergence. Price may play around at these levels over the next month but a move higher is likely on the way receiving a possie d bounce. Price is under the moving averages at where prior mean reversions began. Price tagged the lower standard deviation band (pink) so a move back to the middle band at 18.69, at a minimum, would be expected, if not a move to the upper band at 18.88

Global note and bond yields may remain low for months or even a few years before the inflation and hyperinflation hits, however, Japan may react differently with yields rising faster. The chart set-up is attractive from a long perspective so the narrative is molded around the technical's. Keystone has a JGBS long position open and added more this week. Caution is required since the instrument is thinly traded. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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