The Bond Kings Have Been Schooled
Bill Gross and Jeffrey Gundlach are magnificent bond fund managers, they are known as the bond kings. Recently, both bond kings have suffered large redemptions within their bond funds as losses are realized due to interest rates rising.
However those that follow cycles would have placed in their 2013 playbook that the forecast for interest rates was up due to a cycle bottom expected mid 2013. When price action supports the cycle you must respect the cycle. This time it is very different as the impulse move from the low for interest rates has been spectacular and suggest there is more to go. 3.25% is an easy target.
The following cycle was determined by the RTT Cycle Finder Spectrum and What If tools.
The funny thing is that, the only buyer of bonds is the US Federal Reserve, every other major participant is a net sellers of US paper. Every newsletter writer has been touting the risk of breaking the 30 year trend trend line from 1982, so you have to guess if that line is to be defended more buyers will be needed to buy US paper along with the FED. Q: How can you get more folks to buy US paper? A: Have a market crash or serious correction to force a flight to safety from stocks to bonds. Just saying!
"Frequent requests are made for the name of someone who will teach the Art of Tape Reading. I do not know of anyone able to read the tape with profit who is willing to become an instructor. The reason is very simple. Profits from the tape far exceed anything that might be earned by charging tuition fees to his students. Its simple economics." ~ Richard D Wyckoff
"The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell." ~ John Templeton