For the majority of the past 13-years, the yield on the 30-year bond has stayed inside of a falling channel.
Yields are moving higher, off of support at (2). For those looking to score on defense, buying TBF, with a stop on break of the bottom of the channel is the play at hand!
Thanks for the reply. I’m looking at the Mar’11 calls. However, I think I will watch TBF for a week or so as rates may still continue to fall.
I certainly believe that we have a bubble in the bond market and shorting it looks like a good idea(at some point). However, given the head and shoulders of the DOW and S&P, do you think we have more time to wait it out? I tend to believe that market sentiment will change after the mid-term elections. Cash will flow back from the bond market and into equities. Of course the perfect storm would be a sharp rise in rates coupled with a flight back into equities.
John,
I like the way you are thinking…This play to Harvest bonds or attempt to score on defense on this 13-year falling channel in yields is more of a long-term play. I will defer to other experts on your options question.
Chris
Chris,
For those looking to use the power of leverage via call options. What strike price and experation would you recommend on TBF?
Thanks!
J