The bets on bonds have reached an extreme.
Everyone is pilling in.
The conventional idea is that the recent actions by the Fed (lowering of the interest rates) will continue to drive bond prices higher.
But since everyone is betting on higher bond prices, the exact opposite will likely happen.
Futures traders are the most bullish they’ve been on higher bond prices in four years… and even mom-and-pop investors are pouring into bond ETFs.
However, if you take a look at the recent history, we saw something similar in 2013, 2016, and 2017. And every time it led to lower bond prices shortly thereafter.
Take a look at the 20+ Year Treasury Bond ETF (TLT) everybody is buying.
The chart has gone parabolic… and you should not be buying TLT right now.