Pending Treasury Exit?
- Posted by DynamicHedge
- on July 18th, 2012
There have been at least as many betting against the Treasury bull as there were betting against the natural gas bear. These trades leave many a bodies in their wake but eventually the corpses are proven right.
Are we seeing the start of capital coming out of treasuries? Since it had a blow-off top a couple days ago it looks very soft. If $TLT trades below the green shaded area I will take it as a sign that money is rotating out of the safe harbor of Treasuries and into the rough seas of equities. This could move the market and the $SPX MUCH higher. On the whole, investors hate stocks and love bonds (of all varieties: MBS, Corporate, High Yield, Treasuries, etc). How long it lasts is anyone’s guess.
If treasuries keep rising along with equities it’ll be a case of whoever blinks first. Something will have to give.
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DynamicHedge is an equities, futures and derivatives trader based on the West Coast. He runs a long/short opportunistic relative-value strategy within a proprietary trading group. More
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