The recent pullback in iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) from all-time highs suggests the incredible amount of fear built up in markets is unwinding.
The $3.9 billion Treasury ETF fell more than 1% on Tuesday and dropped below its 50-day moving average. TLT hasn’t traded below this technical indicator since April.
Pessimistic investors are extremely bullish on U.S. Treasuries, which are seen as a safe haven from Europe’s debt woes and weakening economic data. [When Will the Treasury Bubble Pop for Bond ETFs?]
Bloomberg News reports investors in Treasuries are the most optimistic since November 2010, according to a recent survey by Stone & McCarthy Research Associates.
The high number of bulls means Treasury ETFs could fall fast in a countertrend move. Equity bulls argue the market has plenty of fuel to rally if all the money hiding out in bonds comes tumbling into stocks.