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Short Treasurys trade getting crowded

Jan. 23, 2017 10:51 AM ETIEF, UST, PST, IEI, SPTI, GSY, TYD, TYO, VGIT, SCHR, DTYS, DTYL, TYNS, TBZ, TBX, DFVS, DFVL, HYDDBy: Stephen Alpher, SA News Editor
  • In no surprise given the trend-following nature of most investors, bearish speculative bets on Treasurys hit a record this month.
  • Treasurys have suffered five consecutive months of losses, but when the fast-money crowd gets this much to one side of the boat, the market moves the other way more than 75% of the time, write Brian Chappatta and Liz McCormick at Bloomberg.
  • This particular data concerns the 5-year note, where yields have more than doubled since July, with the move accelerating since the election.
  • "Real money always wins," says Seaport Global's Tom di Galoma. "Speculators tend to get taken out. We've seen this occur several times in the last 10 to 15 years, where everybody thinks rates are too low.”
  • ETFs: IEF, PST, IEI, TYO, UST, DTYS, VGIT, TBX, SCHR, ITE, GSY, TYD, DTYL, DFVL, TBZ, DFVS, TYNS, HYDD

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