What Bond-Fund Flows Say: ‘Total Capitulation’ - Income Investing - Barrons.com

I perk up when I hear the words total capitulation.  That’s usually a short term change in direction.  In this case bonds should rally if really all the sellers have thrown in the towel.  I don’t really buy it but….

What Bond-Fund Flows Say: ‘Total Capitulation’EmailPrint smallerLargerBy Brendan ConwayThose aren’t my words; they’re from Bank of America Merrill Lynch strategist Michael Hartnett. He and his colleagues call it a “blood bath” in bonds, the likes of which has only been seen a few times since the numberkeepers have been in business.Here’s what all bond-fund flows the last few weeks look like versus the last decade or so of history — the chart goes back to 2002:

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