Since the Fed rate cut on September 18, 2024, Non-Commercial Traders have continued to increase their 10-Yr Note short positions. Non-Commercial Traders are expecting the value of the 10-Yr Note to decline as rates move higher. Ultimately rates will move lower as they did in 2007. This aligns with similar positioning of the Dow and S&P500 during the second week of October 2007.
At first glance it would seem Non-Commercial Traders are on the wrong side of the trade. The reality is they will chase this trade until the last minute and quickly unwind their short positions as the value of the 10-Yr Note moves higher.
Note that this information is for educational purposes only and not a recommendation.
Interest Rate charts courtesy of StockCharts.com.
