This is really an asset I'd love to buy for my mom or something like that, but I like it and have liked it for quite a while because I see something there out of the ordinary, last night the Treasury's estimate of funding needs was 30% lower, that alone is likely one of the causes of the underlying signals I'm seeing, the fact that banks are at unrealized losses on their Treasury holdings and how the F_E_D must react to remedy that situation is another reason.
I often say with 3C we get a signal, but by the time we understand why, the money has been made and it's too late. In this case it seems the reasons are right there in front of us, there seems to be a large, very quiet accumulation effort and yet more people are bearish TLT.
The only thing I don't like is the low beta, options aren't really an option as the market for TLT is so thin on the call side and shorting TBT to get leverage doesn't seem to be a good longer term strategy, you know how hard it can be to find and keep those borrowed shares so I'm going to just fill out the core equity TLT long right here.
I have posted plenty of charts, but after the close I'll post the intraday charts that made me decide to fill out the position today.
Is interest rates about to start going up?
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Yes, I know - it does not make any sense - FED is about to cut
rates...but....real world interest rates are not always what FED wants it
to be.
5 years ago
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