[Chart] The Big Bad Bond Bear

Charting the bond bear market (and next steps for investors) +thoughts on the US dollar, gold, and credit spreads…

Note: this is a new series for free subscribers and is intended to give an insight into the work that goes on at Topdown Charts (+deliver some useful and timely takeaways).

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Chart: Bond Bear Market

Bonds have been in a 6-year long bear market, with long-term treasuries seeing capital losses of -50% off the peak.

Even after factoring in interest received and reinvested (but also adjusting for CPI), those who invested in TLT 20 years ago would be flat-to-negative on their investment.

As a result, bonds are Unloved (consensus bearish sentiment), Undervalued (cheap on my indicators), and Underallocated (investor allocations to bonds are at 25-year lows). And I think this could be one of the biggest contrarian setups of our time…

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Bond Market Outlook — What do you think?

(what’s your view/how are you positioned [in longer duration treasuries]?)

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Weekly Report Notes

Here’s the topics & takeaways from my latest report —it should give a good sense of what I tend to cover in the Topdown Pro service as well as providing some high-level insights into how I am currently seeing Macro & Markets:

1. Treasuries: there is a compelling contrarian bullish setup in bonds (cheap valuations, bearish sentiment, very light allocations/positioning), but still awaiting the macro/technical confirmation.

2. US Dollar: lean bearish over the medium/longer-term, but a clear bullish picture is building up over the shorter-term horizon; on-watch for upside risk (and mindful of spillover effects).

3. Gold: gold continues to face downside risk as bearish technical momentum builds, and still significantly expensive valuations + crowded/consensus bullishness shows no sign of capitulation yet.

4. Credit Spreads: continue to monitor the risk outlook for credit spreads given expensive valuations in credit + equity markets (for now complacency is justified by calm/supportive macro, but that may change).

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Thanks for reading! Reply to this email if you have any questions.

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Best wishes,
Callum Thomas
Head of Research at Topdown Charts

Connect: LinkedIn | Twitter/X | Substack

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p.s. What do you reckon?

Please provide feedback below (reply by email if you had any specific points)

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Also, in case you missed it: be sure to check out the previous note — in this post you will find more macro market musings +a key chart on the Outlook for 2027 [and last week’s survey results!!]

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Learn more about Topdown Charts —> this post explains what Topdown Charts does + The Topdown Charts Framework for monitoring macro & markets to consistently generate profitable ideas:

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