Courtesy of Chris Kimble
Two months ago today I posted the chart below, sharing that yields had created a bullish falling wedge on 17-YEAR channel support.(see post here) At that time the yield on the 30-year bond 3.82%. The suggestion was to harvest bonds on yield support and to look to score on defense, by picking up TBF.
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Now look what has taken place in the past 60 days….
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A huge jump in yields has taken place over the past 60-days and the long bond has fallen over 10% in value! Keeping with the trend, it has paid to go long yields at the bottom of the channel (short bonds) and short yields at the top of the channel (buy bonds). This trading range play has worked pretty well over the past few years. Is it going to be different this time around?
