Mother of all heads and shoulders in bonds…

Posted on Jun 04, 2013 by in Letters

http://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=3&mn=7&dy=0&id=p07182475852&a=261274354

We have been saying for quite a while that bonds were a trap waiting to spring, and have been short for sometime.  For family 529 accounts we just booted all the bond funds and switched to stock funds. (Unfortunately we can't manage the capital ourselves.  That would put the fund industry out of business, and they do a lot of business with Congress.)  Then our colleague Blair Cummins pointed out the following chart to us.  The break of the 15 month trendline would be enough to liquidate positions, and this picture completes the picture.

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