Bloomberg reports short positions against long-term Treasuries are at 'extreme' levels, all premised on the Fed hiking on Wednesday — and more than 90% of that hike is already priced in. The single biggest driver of the selling is therefore scheduled, kno

Verdict: a plausible squeeze thesis with no armed entry and a two-trade evidence base — wait

The trade is worth watching, not taking — today, nothing is armed. The strongest point for the idea is positioning: per the Bloomberg report from September 15, 2026, shorts against long-term Treasuries sit at 'extreme' levels, all keyed to the Fed's scheduled hike with more than 90% of it priced, leaving few incremental sellers after the decision. The strongest point against is the state of the evidence: the completed backtest covers just 12 months and exactly 2 trades (a 50% win rate, about 9.7% total return, with a 9.5% maximum drawdown), the 24- and 60-month windows failed on a market-data gap, and parameter sensitivity returned no recommendation because the frozen rules could not be evaluated — so no robust setup was established and you take the frozen rules as-is. There is also a direction mismatch: the thesis is bullish on TLT after a confirmed hike, but the published rule is a short-configured reversal fade, and its exit condition (RSI below 30) is already met at 24.2. Execution adds friction — exits were filled on daily bars, so the 2.4% stop and 4.8% target fills are approximate. What would flip the verdict: TLT confirming the bounce by closing above the 20-day EMA ($81.93) with RSI crossing 40, followed by a reclaim of the 200-day EMA at $85.67, would make the entry actionable on its own terms. TLT is a $41.1B ETF, so liquidity and capacity are not constraints for a defined-risk position.

Trade now

**Wait — the entry is not armed yet.** TLT closed at $80.68, and the strategy's four entry conditions all need to flip before a position is taken. Two are close: the stochastic lines are at the crossover point (K at 10.4, effectively touching D), and price sits $1.24 below the 20-day EMA at $81.93. Two are far: RSI (14) is 24.2 and needs to cross above 40 — a 15.8-point gap — and price is $4.98 below the 200-day EMA at $85.67. None of the four is met today, so the correct action is to wait for the reclaim sequence, not to pre-position. **Risk and reward once triggered.** The rules size the position at fixed 2.4% risk with a hard stop at 2.4% below entry and a take profit at 4.8% — a 2:1 reward-to-risk by construction. The structural exits reinforce this: a close at or below the second support level ($82.88 on the current level set) takes profit, while a close above the second resistance level ($83.84) or above the 78.6% Fibonacci retracement stops the trade out. Note the idea's own bullish squeeze thesis (per the Bloomberg report on extreme Treasury shorts) is expressed here as a reversal-fade entry — the signal fires on TLT *strength* returning, which is exactly what a post-Fed bounce would produce. **What 'wait' means concretely.** Do not buy TLT at $80.68 simply because the thesis is bullish; the rule set requires the bounce to be confirmed (price back above both the 20-day EMA and, ultimately, the 200-day EMA, with RSI recovering through 40). The 12-month completed backtest for this rule set traded twice, returned 9.7%, and showed a max drawdown of about 0.09% on the equity curve — supportive, but only if the entry conditions are honored. If TLT keeps falling and RSI stays pinned below 30, the exit rule (already met on the signal side) tells you the bounce never came; there is no trade to manage.

A Crowded Short Into a Known Event — and a Backtest That Actually Traded

The core of the bull case is…

Scores

• Conviction score breakdown: 42
• Thesis support: 60
• Trade readiness: 20
• Risk quality: 45
• Backtest evidence: 35
• Fundamentals trend: 50

Watch items

• TLT — RSI (14)
• TLT — Price vs 200-day EMA
• TLT — Price vs 20-day EMA
• TLT — Stochastic (14) K vs D
• TLT — 12-month range low
• TLT — RSI (14)