Friday, June 19, 2009

How To Play The Falling Bond Market

If agree with me that U.S. long bonds will continue to decline as the Treasury borrows massive amounts of money to fund our deficit than you want to take a look at this chart of Pro Shares Ultra Short 20 Year Treasury (TBT). A very powerful technical signal called a "golden cross" is when the 50 day moving average (blue line) crosses over the 200 day (red line). This forecasts higher prices for any security exhibiting the golden cross. As the bond market declines this security will rise. I believe we are at the beginings of a serious decline in U.S. bonds, this is one way to play it.-Lou

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