We are not seeing a strong emotional reaction to the payroll numbers either way, leaving me less likely to trade the broader market. Treasuries are lower after yesterday's breakdown. I will be looking to buy treasuries via the TLT in the coming days if we get a little bit more of a washout.
There are two reasons I believe Treasuries might be ripe for a long trade. Sentiment on treasuries is very negative and this latest breakdown has the potential to get sentiment extreme. That is usually good for at least a bounce. Secondly, I believe rates are reaching levels where they will negatively effect the broader economy and have a slowing effect. While treasuries might be terrible long term investments they could be setting up for a nice trade.