Wednesday's Trade

By I will have submitted pretty conclusive evidence with the jitney trade of GBN.V shares in amongst almost the whole resource sector, that the bond markets are clearly being pitted against commodity producing assets. This is part of the failed strategy of Operation Twist, which was supposed to divert monies into treasuries and devastate commodities prices.

The correct strategem commodities producers here is to yield a dividend in this case as share pricing models are thrown out the window. Many resource sector stocks have robust yields, especially in the oil and gas sector. But gold producers have also been cranking it up as well. GBN.V is well situated to compete in this fashion.

News this Wednesday shows that TIPS, or Treasury Inflation Protected Securities in the U.S. closed the bond auction, though there is no real information on the long dated bond. TIPS yields in the 5-year and 10-year are negative. Yields in the longer dated TIPS are below 1%.

Long dated TIPS at auction had failed on the previous auction and are being offered with a few months chopped on the maturity date.

Treasury Direct

Bloomberg Government Bonds

The average long dated bond yield from the Bank Of Canada updates every day, and the yields did not record a new low, though GBN.V shares were under pressure this week and could not muster a rally. If you did not know any better, you could mistake this chart for GBN.V.

Bank Of Canada Average Yield On Long Dated Bonds

Source: Bank Of Canada

Daily Ichimoku

TIP was added to the daily Ichimoku technical analysis of GBN.V.

TIP prices make a very good proxy for the average long-dated bond yields in Canada and can be displayed behind the share price, making for a convenient way of demonstrating intermarket activity.

As you might have noticed, watching massive, highly liquid markets and anticipating their rout is as agonizing as watching GBN.V share get totally crushed in the anticipation of a possible rally in share prices.

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-F6