Everyone seems to hate U.S. Treasuries as stocks flirt with all-time highs and amid widespread expectations the Federal Reserve on Wednesday will announce plans to taper its bond purchases.
In fact, sentiment on Treasury bonds has dropped close to multi-year lows. The levels also coincide with bearish sentiment readings that have set up powerful Treasury rallies, or falling yields, in recent years.
According to sentimenTrader.com data, bullish sentiment on Treasury bonds has fallen to 25%, Kimble Charting Solutions said in a newsletter Tuesday.
Technical analyst Chris Kimble pointed out that sentiment levels fell to a similar extreme about two years ago when Moody’s threatened to downgrade U.S. government debt. Back then, bullish sentiment on Treasuries fell to 28% right before iShares 20+ Year Treasury ETF (NYSEArca: TLT) rallied more than 30% over the next 11 months.
The overwhelming consensus is that the long-term trend for Treasury yields is up, and bond prices are heading lower.