Bonds and stocks will continue to trade inverse to one another until we hit the right numbers. Either stocks hit levels that causes it to plateau or bond yields rise to a reasonable level. The dollar continues to make gains versus the euro, which is an incredibly crowded trade. I don’t play forex; but I hate long dollars here.
Look, TLT has been a great place to hide for the past year. The market has moved away from bidding up speculative money losers, in exchange for larger cap free cash flow generating machines. Because of this change in market dynamics, investors were hurt over the past 12 months.
Over the past week or so, chinese burritos and spec biotech have been running with their socks off. While it’s nice to enjoy these gains and see speculation spreading throughout the marketplace like a good form of cancer, it’s important that you remember that there isn’t a such thing as good form of cancer.
Sell the rips in these names and stay focused on the real companies, who might be selling off a bit here.