The Last Stand for Bond Bears

2014 has been a body bag type of year for bond bears pushing the envelope. I, myself, have been looking for a reason to make some big bets on the short side in the bond market, but ultimately stuck to my discipline of "no trigger, no trade" and took a pass on making the bold top-call. Still, I took some shots here and there, with a nice win earlier this year and a few contained losses otherwise.  In recent months, I have remained flat bonds. That said, I am still looking to get involved after the whacky mid-October action we saw in Treasuries, denoted by that monstrous candlestick you can see on the TLT daily chart, below, off the lefthand side of the chart. Since then, bonds pulled in a bit, then went dead for several weeks before recently staging another rally back to those October highs. Monday's price candlestick is often refereed to as a bearish "hanging man" candle, despite looking exactly like the bullish "hammer" reversal. The difference between the two is location--The former is a reversal candle after a prior uptrend, the latter after a downtrend. Here, if we see the bond market finally revolt agains the Fed, admittedly a contrarian position at this point, then TLT should confirm this bearish hanging man lower, at a minimum. $127.70 is the level of important to the upside. Despite now having David Tepper on their side, bond market have been laughed off the stage for a good while now. With improved unemployment, QE tapered off, the wildly dovish Fed member Kocherlakota set to leave, you get the feeling that bond bears have one last good chance to top this bull run out before we truly do confirm that we are "Japan."