Okay I get that bonds have been in a bull market for over 30 years now and so it’s become the ‘cool’ thing to be a bond bear lately. But it looks like everyone has thrown their hat in the ring to be a hater on Treasury bonds. Over the weekend Business Insider published the results of a BAML survey of managers in regards to their Treasury holdings. The results of the survey found that the majority of fixed income managers aren’t even long Treasury bonds at all.
From BAML via Busineses Insider: 
According to BAML strategists Ralf Preusser and Richard Cochinos, 66 percent of investors are no longer holding Treasuries, and 11 percent are thinking of selling.
The two write in a note to clients that with such bearish sentiment toward U.S. government debt, “the sell-off in Treasuries may be running out of steam.”
As we have one source of overly bearishness towards bonds, lets take a look at the actual positions in the futures market for the 30-year Treasury’s. As the COT chart below shows, small speculators (green line) are fairly stretched net-short on a historical basis. With the ‘smart money’ (the commercial traders red line) holding a rather large net-long position in 30-year Treasury’s.
So fixed income managers hate bonds, individual traders (small speculators) hate bonds, and a large percentage of Wall Street strategists have come out against bonds. Whose left to sell bonds? I’m not here to take a stance on the whole ‘Great Rotation’, I’m not a bond expert and I’ve never played one on TV. What I will say is that it appears sentiment is pretty over-stretched at current levels when it comes to the fixed income market. It’s very possible we see further weakness in the bonds and yields continue to climb and the prognosticators may end up being right, but the sellers may need to take a breather to reload before attempting to pump more bullets into the bulls
Source: Tons Of Fund Managers Have Already Dumped All Of Their US Treasuries (Business Insider)
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