Buy US Treasury

Due to a busy schedule this weekend, I don't have time to write. It just happened that my friend, Dr. Pan Yang, posted a note, which outlined a thought almost exactly reflecting what I'm thinking. Here is what Pan said: " It was very interesting in past few days,  10 years yield was dropping since Fed meeting.  TLT is forming a falling wedge which is bullish, sitting at support .  Sp500 is challenging all time high as the resistance zone. We all know the bond and equities are going opposite directions. I also mentioned few days ago that 10 year yield and equity market have been positive correlated in past 10 months. My 2 cents,  some things have to give up.  I would follow bond, since it may be smarter than equities.  If yield is continue going down,  that means bond investors can not see our economy have strengthen enough in the future months or years,  the equity market will follow soon. Or vise versa, we will have new bull market,  yield will bounce up and TLT will break support, continue falling.  Thanks for Yellen,  leave the door wild open for potential rate hike,  give people impression that our economy is in good shape, and keep this impression as long as she can, while the markets around the world are struggling.  It is very hard to imagine that US market can be the only one immuned from it. Anyway, I entered short positions today,  I could be  wrong but it is part of the game. Have a nice weekend"


Consistent with what I was thinking and suggesting to buy NLY due to likelihood of a continuous low rate era in the next 1-2 years, I do think TLT is a good buy now, which is an ETF for long-term Treasury Bonds. It is just bouncing off from its 50 DMA, a strong support and I think there is a good chance it will move up significantly higher in the months ahead. This will also likely be associated with lower equity markets as Pan has suggested.