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horsedentist
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horsedentist's Blog : More Proof the 30 Year Bond Rally is Finally Over

Date March 9, 2011    Comments Comments (11)    Rate this post Recommend This Post (377)   
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After a lack luster day the news that “bond king”  Bill Gross backed up his bond bear talk by selling off all US backed bonds including Treasures,(WSJ 3/9 11:35am). This news was just the pick me up I needed. Since Nov I have been in and out TBT, a 2x ETF which is tied to higher bond interest rates.  I also like TMV a similar 3x ETF.  Since Egypt started Mid East stress both TBT and TMV have been down slightly then I play the inverse 3x ETF TMF.  I did not read today’s news until after the market closed today.  I wondered why TMV took a sudden dip at the end of the day.  Was it Mid East unrest that keeps bonds as a  safe haven for many investors? but how long will it last.  Bonds rates will be going up and more money will flow to equities.  There is a lot of money to be made in the ETF’s TBT and TMV when rates start going up again.  During their big jumps in Nov and Dec they seemed to go up 2 days and back one day.  The most import point is that as money flows out of bonds and into equities the bull market will keep going and going strong.  The  big dip that hit TMV Wed afternoon. may turn into a big jump up Thursday.  The news of Bill Gross selling  bonds will sink in for investors faster than Obama can make a decision.

Tags : TBT   TMV   TMF  

11 Comment(s):

Author sporthunter     Date March 10, 2011 07:49 Abuse this post Report Abuse
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Let me understand when the market is in BULL mode, etf TBT will over perform and when the market is in Bear mode you play TMF. Is this the correct directions. Curious. Happy Trading
Author JoeJustJoe     Date March 10, 2011 08:57 Abuse this post Report Abuse
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Gross is making some tremendously bad moves in the past 6 mumphs. He's acting like Peter Schiff now and trading on "the obvious". Selling ANY kind of treasury bond fund will prove to be a BIG Miss Take in the not too distant future. Gross is also saying foreign inbestments will outperform U.S....he's right, foreign stocks will git crushed twice as hard as U.S. stocks but only haff as hard as gold n silber plays. This selling in the gold n silber plays this moanin is simply a result ov Lilnev's blog spewage about how GRRREAT the silber plays are. This isn't "the" selling. That happens whenst (not if) I top EVERYTHING out together...including intrust rates *-) 3J
Author horsedentist     Date March 10, 2011 09:16  Edited: March 10, 2011 by horsedentist Abuse this post Report Abuse
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sporthunter,
Not exactly, certainly bonds were attractive to hold during 2008-09 stock sell off. They were also attractive to hold because of US monetary policy has controlled inflation. TBT is a relatively new ETF since 2008. TBT reached a low about Oct 4 2010. US treasury rates started going up about that time also. There is a big gap between them now, TBT needs to catch up. Right now that catch up process has been halted by the Mid East and oil prices. There is a temporary flight to safety of bonds by some investors. That flight to safety becomes harder to make as inflation increases and the stock markets keep rising. For a lot of people Aprils 401k results will start telling them it’s time to get out their bond funds and into something more rewarding such as stocks. In addition when, not If, the Fed raises the prime rate and there will be a flood of money back into the stock market.
TBT,TMV are really short term plays and probably will not out perform long term market. I feel it is a very low risk play. We know inflation will increase and the Fed will raise the prime rate.
Author JoeJustJoe     Date March 10, 2011 09:23 Abuse this post Report Abuse
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We "know" inflation will increase? Of course we do, EVERYBODY "knows" that. I DARE ya to buy n hold that thur theory :-) 3J
Author horsedentist     Date March 10, 2011 09:26 Abuse this post Report Abuse
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3J,
Good to hear from you. It's a pleasure to read your insight on things. I do wish I had acted on Lilnev's blog on silver. Maybe I can get in after its dip.
Author JoeJustJoe     Date March 10, 2011 09:30 Abuse this post Report Abuse
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Sho, why not...silber is going higher once this round ov selling is complete. All ya gotsta figger out is wherst toooo >>> "buy the pullback" *-) One would imagine that "the" play ov the frenzied crowd...this POS right cheeeya >>> EXK will lead the next rally. Of course one "woulda" thunk the plays that led previosu rallies woulda particimapatd in this rally like htese 2 right cheeeya >>> NAK n NG ...but ov course they didn. So I'll let you figger it out. My job is simply to crush em! :-) 3J
Author horsedentist     Date March 10, 2011 09:31 Abuse this post Report Abuse
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3J
I will take that dare that inflation will increase. Bought any steak lately? Tried a $9 cheeseburg? How about a nice 3 pack of Fruit of the Looms? As far as Buy and Hold, I do not do that anymore. I learned the hard way.
Author JoeJustJoe     Date March 10, 2011 09:47 Abuse this post Report Abuse
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What do you want to bet for. Howzabout a nice bottle ov wine err sumphin like that thur? Even whenst (not if) you lose you really can't lose since a bottle ov wine will be cheeper than it is now whenst (not if) I am proven correckt. :-) BTW, the thangs you mentioned are all part of the "obvious" I am spekkin about. Remember, it twas also very "obvious" that home prices would continue to increase back in late 2005. It was soooooo "obvious" that the price of oil would increase that GS raised thur targut price to $200 dollahs ifn you recall. The absotoot werst emeny ov inbesters is "the obvious" *-) $9 cheesbergers...what..do you go to Disney Werld every day er sumphin? Ifn thaas the case put some "variety" in yer life and have a $7 dollah hotdog insted :o 3J
Author horsedentist     Date March 10, 2011 10:07 Abuse this post Report Abuse
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Once again you brought out your weapons of mass distruction - DOW down 195.
Author JoeJustJoe     Date March 10, 2011 10:16 Abuse this post Report Abuse
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Like I sed ba ba bafo...I see no reason why NE1 would be long anything since it is purt near impossibull to make any $$$ by going long a RAGING bullmarket. It jist ainna happenin :-) That sed...I'm wreckin my FAS play jist confirmed the opening 30.18 low whenst it traded below thur altho I is waiting fer the chart to setup. If that is the case you kin go long FAS like I is. I sed it is "purt near" impossibull to make $$$ by going long a RAGING bullmarket. ..that means >>> "almost" impossibull *-) 3J
Author Burtman     Date March 10, 2011 10:50 Abuse this post Report Abuse
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Horse - on TLT 3year weekly chart the MACD is not crossing over. This may mean there is more downside to go and the opposite TBT has some upside. Long Term though TLT will be a buy in the next few months IMHO. The high in Dec'09 will need to be confirmed eventually. That will bring cheap refinancing - 3.5% or so but also a market collapse - I could use some better refinancing LOL.
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