This chart is why I am long Treasuries. This is a 23 year price channel for chrissake! Rates have also rallied into roughly their average level from 02-07. Also at the 50 month moving average - they haven't held a rally above there in nearly 30 years. This is a
huge divergence between popular sentiment on rates (everyone and their mother says they're going higher) and the long term pattern (which says to get short rates/long bonds at these levels). I recently read something that said treasuries are the most hated asset classes among money managers and the general public. If this channel ever breaks
then I might think about getting short bonds. That would be an indication of a massive sea change.
Fundamental reasons? We've lost far too many jobs for unemployment to make a rapid comeback. Sure the fed is printing money, which can easily lead to inflation
eventually, but right now the fight is against deflation and money it is injecting into the system is not multiplying through bank lending like it's supposed to. I believe in John Mauldin's "muddle through" scenario, with a recovery that is so slow it still feels like drawn out recession. This scenario would imply that rates can stay lower than most people think.
Watch support level at 41.70 - take 2/3 of my profits by then. That level held in 03, 05, 07, and again in 09. Hold the rest as a tail.
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