There have been some rotational trades in the early part of the month in the Fixed Income realm, with buyers of longer dated U.S. Treasury Bonds via TLT (iShares 20+ Year Treasury Bond, +$970 million month-to-date). Additionally, we have seen some outflows in Investment Grade Corporate Bonds that may be possibly related, with LQD (iShares iBoxx $ Investment Grade Corporate Bond) losing over $530 million month-to-date via redemptions.
TLT traded at a fresh multi-month high just five sessions ago before sinking back to present levels, amid a rise in interest rates in the market. Still, the fund is comfortably above its 50 day MA, a level that has provided support on two occasions since August.
Elsewhere, we continue to see carnage in the “Long Volatility” space even though the VIX itself is actually up today and is not anywhere near its late July lows where it briefly clipped $9. Split-adjusted, VXX is in danger of creating a new all-time product low and as we mentioned yesterday, the levered “Bull” UVXY as well as TVIX are both getting punished again today to new all-time product lows and heavy pressure. Once again, contango in the VIX futures market is exacerbating these perplexing moves, and “Long Vol” holders’ heads are likely spinning.
The iShares Barclays 20+ Year Treasury Bond ETF (NASDAQ:TLT) was trading at $126.62 per share on Wednesday morning, down $0.17 (-0.13%). Year-to-date, TLT has gained 7.85%, versus a 12.90% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.