Editor's Note: This is an excerpt from Hedgeye research this morning. If you're curious and considering becoming a subscriber (a very good idea), please feel free to take a look around and see how we can help you by clicking here.
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So, a very loud and vocal chorus of Bond Bears was out in force yesterday (see Bill Gross on German Bunds… and in the U.S., those saying the Housing data was “too good”, so that meant the Fed would hike, etc, etc).
All that chirping accomplished was tap the top-end of our 1.84-1.99% immediate-term risk range for 10YR UST (which we are still long via TLT).
Our advice? Buy red, sell green. In other words, buy more bonds at the top-end of the yield range.
Rinse and repeat.
