Are Bonds out of Mr. Rogers’ Neighborhood?

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Last evening, iBankCoin Financial News reported that Jim Rogers had essentially called a top to the secular bull market in bonds. Rogers is never one to shy away from giving his opinion, but it is worth noting he has had success in commodities more than any other asset class. If he is correct this time, then you would expect the chart of TLT to go parabolic and then crater, as would be consistent to the grand finale of most secular bulls. Now, on the monthly chart (2nd chart below) we can see how steep the recent move has been, directly into those 2008 highs. Bonds have since stalled there, but they have not yet cratered like they did a few years back. Incidentally (or not), this is about when stocks were in the process of making a major bear market bottom.

Despite the temptation to extrapolate the 2008 coming-around-the-mountain scenario to the present, the daily chart of TLT has seen no real signs of a violent sell-off after the steep run. Instead, I would argue the recent pullback has been rather orderly and quiet. Keep in mind, TLT has not tested its rising 50 day moving average since late-July. All of that is consistent with a pullback within an ongoing uptrend. I know I am simplifying things a bit here with the ETF, but the volume is also not indicative of some type of heavy selling event at a major top.

Since everyone is a contrarian these days when it comes to stocks, the trade that might frustrate the majority would be to see bonds commence another major leg higher.

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