2008 was one of the best years on record for U.S. Treasury bonds. The ishares Lehman 20+ Year ETF-a good proxy for 30-Year Treasuries-gained 23% over the year. However, Treasuries seem to be winding down an unprecedented bull rally, with rates retracting from historical lows. The big question on traders’ minds is when the Treasury “bubble” will burst? It is still too early to tell, but TLT has taken a big dip over the last two trading sessions, down 4.55%. It should be noted that this occured over low volume holiday trading, but with general equity market volatility, as measured by the VIX, subsiding, this could be the start of a broader bond bust. Continue Reading
