Here's a quick note as I'm still trying to get back in the swing of things after returning from Disney and the east coast beaches of Florida.
Just as we saw in October of 2008 we are seeing a move in Treasuries that is abnormal. Buyers of Treasuries in size are typically NOT Mom and Pop (although I bet we have more Moms and Pops in there than 2 years ago). Bad things happen when lots of people are willing to put their money away for 30 years and receive 3.94% or sock it away in the 10 year for 2.95%.
This move in treasury rates is not good and I will be watching the bond market for additional signals that confirm this breakout. This is not a moment to be a hero and take on a bunch of extra risk. In fact, if we do get some sort of stock market rally, it must be used as a opportunity to unload some long positions.
A further move up in TLT may portend a ride like this –
Goatmug
