The chart below was the August 18th quiz on dshort.com, (see post). Reflecting a “crossroads” of resistance in the bond ETF (TLT). Today CNBC is all over sentiment numbers for equities, in that the number of bulls has increased. Speaking of a large number of bulls….On the same day as the quiz, according to the Daily Sentiment Index (trade-futures.com) bonds bulls stood at 98%! Can you say “crowded trade!!!”
I produced the chart above to encourage investors to “harvest against strong resistance, when sentiment was out of sight!” As many of you have seen, I believe in harvesting at resistance! The chart below, posted on 8/29, suggested that bonds were at a “peak in elevation” (see post) and for those wanting to score on defense, pick up TBF.
Below is a current snapshot on TLT…which is breaking another key support line, reflecting an unwinding from the 98% bullish position.
For those of you that shared you harvested bonds, great job, since TLT is down over 5% since the 8/29 post. For those scoring on defense (TBF), the break in the support line is a plus. Use line (1) as your new sell stop for TBF, to protect recent gains.
Many of the 200% inverse stocks funds have had huge trouble with what I would call “pricing drift.” They perform great on a daily basis, yet if you had held them for a period of time the performance has been disappointing to many investors.
Nothing wrong with TBT, I am just concerned that the same thing could happen with this 200% inverse bond fund too.
If rates rise a good deal and TLT declines a ton, will you make money in TBT…. I would think so. Make twice the gain of the decline in TLT? We will just have to stay tuned.
Good luck and GREAT QUESTION!!!
Why do you recommend TBF and not the TBT?