Yields on 10-Year U.S. Treasury bonds are sitting near all-time lows, yet Leuthold Weeden Capital Management’s Doug Ramsey doesn’t see many sellers stepping up to the plate publicly. According to Ramsey, bond traders likely have the memory of the “widow-maker” trade of shorting Japanese government bonds fresh on their minds.

“While there are few public bond bears, we’re watched with interest in recent months as ‘commercial hedgers’ in Treasury bond futures have steadily built up a sizable short position,” he noted. By the end of June, that short position had reached 109,000 contracts, its highest level since 1998.

Ramsey pointed out that the 1998 short bond trade ended up a huge winner, as yields spiked 2.4 percent over the following 15 months during the Dot Com Bubble.

Commercial hedgers also took…

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