I sold another portion of my TLT position today ( I still hold about 40% of my initial June position):
Don’t get me wrong, I think the bull market in treasuries (that I was calling back at June 12) is still in force, but this half-year ride was too fast too much. I think it will paint the right shoulder and make a trip to 200 DMA. Then I guess it will be a buy again.
Here is the fundamental reason: the new $200 bln TSLF facility will hit the market at March 27th. It will not add a dime of new money to the system, but it will add a bunch of new treasuries, right at the time when the Treasury dept is getting less then expected tax returns and is also adding new debt.
I do not plan to reduce my position to zero, just some profit taking