Remember there was a slave assigned to remind the returning triumphant Roman general that success is transient?
Now think of the 10 year bond collapsing in yield from 4.0% on April 5 to 2.60% or less in mid-August, with little major news in this period to cause such an extreme change in price/yield.
In the usual course of events, profits by the buyers the past few months will be taken. Rapid extreme success (to the bond bulls) may be transient, at least temporarily.
The long (30 year) bond has rallied as well but is far less extended on the charts. I continue to mentally target the 10-year backing up in yield or at most stabilizing, while the 30 year trends lower in yield to re-establish the more traditional yield relationship of 50 or 75 basis points difference between them.
So long as the yield is higher from the long bond and the 10-30 spread is at or near historical extremes, the weight of the evidence favors being in the long bond rather than the 10 year.
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