TLT — 10 entries on this page, 2 of them a change of direction.
If you look at the technicals on TLT, TLT is sitting which which is an average duration about 25-year bond. If you look at the weekly chart of TLT, you'll find that TLT is at this nearly glorious bottom.
So, like I'm I'm as short treasuries as you can be. I'm short TLT, Zeros, ZROZ, LQD, which is investment grade credit, high yield credit, HYG, Jojo, which is kind of like a poser manager.
And finally, TLT bonds, we know what's going on with them, right? We hit a new historic low when the 10-year bond yield reached 5%, and we are now trying to get back above that.
Therefore, many believe that 5% may represent the highest level for a period, and that may be true, but what we will be watching is what happens in the short term. Where we have seen this rise, it seems that an upward pattern has begun to form, but we have seen this before, haven't we?
Along the way, even as TLT continued to record lower highs and lows, we saw a repetition of bullish patterns forming, where breakouts were either nonexistent here, lasting only a few days in June, and then for a shorter period in August.
This shows that we should be very aware of the fact that TLT sometimes does, or has done in the past, when it starts to bounce back, and looks good, when it looks like the breakout will be much stronger, then the selling comes back, and yields start to rise again.
And that's why I look at a bond market right now. If you look at TLT or bonds is basically it's essentially a a put on the S&P 500 with positive carry, no time decay, and it's just, you know, waiting around for a trigger.
Now, next, Don, you've brought us another bullish deal today, and you're bullish on the iShares TLT bond ETF , despite the global sell-off in bonds. So, explain the thesis here and what you expect the bonds to behave over the coming weeks.
Global bond sales? This is the right time to take advantage of this type of price movement . Bond vigilantes may appear where there is some selling activity in the bond world. Look , I focus a lot on futures products.
I am watching "ZN", which of course are 10-year Treasury bond contracts. I am watching ZB, which is a 30-year Treasury bond . TLT is a very good combination , so to speak, of both.
we're going to see you know tips we're going to see uh like TLT long-term bonds continue to be under pressure and move down
So, 1 2 3 4. Yeah, July 24. So, you saw that these were rolling over and TLT and TLH were actually, you know, IEF as well starting to improve a little bit. So, I had them ranked like these were blue and these were orange.
But if we scroll forward now, you can see that picture really rapidly changed over the last couple of months. So, now the longer end, especially TLT and TLH, are clear underperformers.
If you were an investor in TLT, which is a very popular longdated treasury bond ETF out of EyesShares, you compounded at almost 8% a year positive through the 2010s. It was a very good money-making investment.
In the 2020s, because real rates have exploded from being negative to being very positive, your kager, your compound annual growth rate over this decade so far has been negative 4.4%.
Uh people are selling down Treasuries really for for two reasons. One, because inflation is high, so they're expecting that at a certain point that the Fed may have to hike in order to tamper down inflation and every time we see further escalation in Iran, further move higher in the price of oil, that is transferring through to the TLT getting hit and and rates moving higher.
The bonds, the bonds just got you know, they were they were getting hammered, and what I think happened in there is the Treasury Secretary said, "Let the shorts feel comfortable for a few days, then we'll go in and say something, and we'll we'll try to torch the short sellers."
Which they did, but then other people came back in and said, "Wait a minute, why did we cover our shorts? Let's add that short back on." Or are those shorts added to it?
