Time Again For T Bonds?
Well, we knew one thing; T bonds were a sell as the Optimism Indexes got as stretched to over bullish as they ever do about 3 weeks ago. The drill was to sell bonds, which I did with extreme prejudice (I only held in the 1-7 year range) and get more bullish on stocks.
30yr T bond OPTIX from Sentimentrader
Now, it looks like bonds are settling down and while I am not taking chances on the longer end, I am back aboard with ‘cash equiv’s’ in the 1-7 year range (SHY and IEI). Last time around this repository provided dividend income and a mark up on principle.
We’ll see if it can work again. If I am wrong, the shorter maturities will roll over the income and should be able to withstand rising interest rates, although I might pare down to just 1-3 years , which is the usual ‘cash equiv.’ unless I have reason – like a few weeks ago – to strongly believe bonds are going down sharply. I don’t have that reason.
BTW, I am going to post more often at Biiwii (along with a few guests) and try to keep NFTRH.com more discrete with subscriber content, NFTRH excerpts on occasion (like today’s post on the Semiconductor Equipment Book-to-Bill for January) and generally real nuts and bolts stuff. Whereas here I’ll just let opinionated but also analytical posts blast, as time allows, in more of a commentary style. Well, that’s the plan anyway.
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