March 30, 2011 – The Bear Market in Bonds is Still Sleeping



3) The Bear Market in Bonds is Still Sleeping. I just wanted to give you this updated technical chart of the long dated bond ETF (TLT), showing that the bear market in bonds is indeed on 'PAUSE'. This will be music to the ears of my Macro Millionaire followers, who are raking in the coins running a short in the (TLT) June $86 puts. Although we have already taken in half the profit on this position, running it seems to be in order. While yields could climb from here, and prices fall, I doubt they will reach the 5.2% the 30 year would need to reach to get the (TLT) to break below our strike of $86.

Keep in mind that this is a short term counter trend trade in the midst of a long term bear market in bonds. We will certainly break below $86 in the (TLT), but not until our options expire. In a market that isn't giving you much to work with these days, this one seems to be a winner.


Wake Me Up in June