25: A Storm’s a Brewin’ in U.S. Government Bonds

I believe the bond market presents the most intriguing opportunity for trend followers right now.

We’ve gone through an unprecedented time of low interest rates since 2008 and now that trend appears to be reversing. This trend may have more fuel than others given the extremely low volatility and overall feeling of complacency.

Long-only bond funds, especially ones that use volatility to size their risk, have built up massive positions so any uptick in volatility or reversal of trend might trigger a mass exodus — kind of like what we saw in stocks and volatility-related instruments a couple of weeks ago.

https://medium.com/@mmelissinos/a-storms-a-brewin-in-u-s-government-bonds-93dd50f338fd