The stock market indexes are strong, we could be building for a new leg higher or a top. The trend is your friend until it dumps you. I have been long bonds, but I lightened up a little on Monday. I think bonds go much higher, so I kept a core position. However, there have been some great gains since March and I didn't want to give it all back.
TLT went from a low of ~133 to a high of ~150, thats an ~12.5% rise in a few months.
TMF went from ~22 to ~31, a 40% gain in about 5 months.
Obviously if the market tops right now, selling will miss the big move up in bonds. But if the market makes one more epic push higher, TMF will likely move down materially.
Its a risk.
Until congress signs an extension to the federal budget debt ceiling, no new US bonds are being issued. Therefore bond interest rates WILL move lower, and therefore bond value higher. To learn more about how this works, read my post How bonds give bigger returns (or losses) than you expect.
I expect a return to the yellow line. Good luck!
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