Long Treasury

I did close out a long position with an ok profit. Cannot
tell whether I am leaving money on the table or not. The
big oversold of a few weeks back that caught my eye is nearly
worked off. The economic fundamentals behind the Treasury are
deteriorating, with industrial commodities and now capacity
utilization both on the rise. I suspect a number of hedge funds
have unwound a major trade: long junk and short the Treasury.
Junk has moved up 100 basis points in yield since late May,
and Treasuries have likely benefited from short covering. The
renewed upward move in the 91 day T-Bill yield to close to 5.0%
suggests the panic in the junk sectors has eased some.

One factor worth noting is that bullish sentiment on the outlook
for the long Treasury price is rather subdued, as measured by
MarketVane. At 45% advisory sentiment bullish, this measure is
in the lower register and suggests keeping track of the bond from
a contrarian perspective.