Bonds, James. Bonds.

*Unfinished post - research continuing*

Market downturn, go long bonds? 

$TLT $TMF Tech --> Small caps --> Bonds Order of rotation law - a made up term but sounds cool 

Seasonality shows that August is the start of a strong uptrend in bonds, coupled with a downturn in tech from mid

 July. 

I wonder if the market comes up with a reason to decline. 

We are seeing some appear --> 

1. Political instability - Trump making comments about what he would do as President. Biden unable to string a sentence together. Some ambiguities on both their future economic policies. 

2. Trump trying to delay rate cut decisions until after the election - So much for "the fed is independent" - though Powell won't have a job after the elections so I doubt he cares and I suspect he uses his majority power in voting decision to get a cut through September by a narrow margin. 

3. Recession fears. As discussed previously, recession odds are not low. Many very accurate indicators like Sahm are flashing and we shouldn't just wave the "it's different this time" flag. That's called being ignorant to data you don't like, and doing this will lose you money. Long TLT, or bonds generally, is a hedge against recession fears. 

4. Rate cut odds. It's highly probable we will get some cuts this year, I'd say 2, max 3. Market is pricing in an almost 100% chance of a cut in September. Heck there is even odds of a cut for July, though I am more sceptical here. If they cut, TLT will rise.

5. It's a safe position to hold. It's fairly common sense that holding bonds is quite low risk, you can certainly buy and never look, you are unlikely to lose money in the long term, and only a fool would panic on a drawdown. Therefore it's a decent asset to hold to mitigate your risk elsewhere - Many investors are long tech right now, if there was something to happen in the markets to spook people - TLT looks quite attractive to offset that risk.

6. Concerns over Taiwan. All really unrealistic from my viewpoint - but the market has panicked over ridiculous things before. Chart enthusiasts might note a rather strong TLT chart from a technical point of view. I'm long $TMF , partly as a dampener to volatility in small caps and general indices which is working reasonably well so far. 

Target 120 $TLT / roughly $100 adjusted for decay $TMF