TLT has been hit pretty hard the past 2 trading days...as can be seen in the share adjustment metrics. This looks like a screaming buy but the technicals have to be tempered with the odds for a continued equities push. Bill Gross (PIMCO), arguably the largest bond trader in the world, noted that the FED currently buys 80% of issued Treasuries. If the FED decides to divest some of those positions or pull back on that level of purchase then we may see TLT fall back to target $97 levels as equities blow the doors off. It could happen.
From the T2 lab here's a little study using the IShares bond ETF AGG as a benchmark and then building 2 separate really low risk models that still kick out twice the return of AGG... one with QQQ and one without. The results may surprise you and with the T2 software you can explore other variations using other components....remember..just because there are 11 slots available doesn't mean you have to use them all.
Of course the momentum metrics are irrelevant for this study but the lower 2 year comparison chart shows there are still opportunities to engage our RSQ and/or P6 stops to improve the returns.
