Long-Term Treasury Bonds Retain Contrary Stance

Bonds have gotten hit pretty good lately and yet the contrarian data (Commercial hedgers very net long and the Public is very hateful toward bonds) never did relinquish during the upside.  Now, with a big pullback, I am going to give this another try.  It’s a good portfolio balancer for someone who does not wish to be shorting anything at this time.

Here’s the graphic from Sentimentrader, with my mark ups.  The net long for Commercials has far exceeded the status that launched the 2 year rally that began in 2014 after everyone took the bait on the Great Promotion Rotation.  This is also a negative divergence to the Trumponomic bull, with no particular indication on its expiration (or interruption) date (though I’m thinking the spring, at latest).

10yr hedge

Here’s my vehicle, TLT, which is added to the always-held SHV and SHY (cash equivalents).  As a portfolio balancer, I’ll give it some leeway in finding a bottom, as I did last time and let it kick off some dividends again.

tlt

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