Macro Insights/Report: Is it time to buy TLT?

The Macro Analysis

I continue to get the question from Subscribers, is it time to buy TLT?

While I have been conducting weekly analyses on bonds for Paid Subscribers that constantly explain these tensions (see report here: Link), I wanted to take a moment and lay out several things.

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First, duration supply is still normalizing and an “imminent recession” is unlikely as we move into December. In fact, GDP numbers were revised up, NOT down like people expected.

Second, TLT remains in a negative momentum regime on a long-term basis. It hasn’t begun to make a series of higher lows and higher highs.

Third, the dominant impulse in markets remains inflation as an “everything rally” is taking place. A recession would be evidenced by a negative stock bond correlation, not the type of price action we are currently seeing.

Without a doubt the rate of change in the total return bond index has accelerated from the lows. However, we have yet to see a durable rally in bonds that would indicate a level of persistence.

Allocating to bonds here would depend on the strategy an individual or institution is employing, specifically, procyclical or countercyclical allocation. Fundamentally though, bonds are in a neutral range according to the models I am running.

The dip buyers in TLT persist and eventually it will rally. However, the question is one of timing.

I write a comprehensive macroeconomic report for Subscribers (which will be released soon) and weekly asset class reports analyzing each asset. They break down these tensions and signals in full. The time will come to pull the trigger but we aren’t there yet.

At the end of the day, it all comes back down to this………

In the information age, you simply need to be at the right place, at the right time, with the right information to succeed