Long-term bonds poised for near-term pop
The speakers presented a case for long-term Treasury bonds experiencing a near-term rally once the equity market peaks and declines, despite deeply negative current sentiment.
The argument
The guest argued that TLT has been building a multi-year base and represents an attractive contrarian position for a zero-to-two-year horizon. They identified the 4.45% to 4.5% range on the 10-year yield as a key technical level to watch.
The thesis, stress-tested
✓ What validates it
- ✓10-year Treasury yield breaks below the 4.45% to 4.5% range
- ✓TLT breaks out of its multi-year base above 85
▸ Risks discussed
- ▸Yields could continue to rise if inflation remains sticky
- ▸The equity market melt-up could last longer than expected, delaying the bond rally
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