A viewer ask if Government bonds and stocks could fall at the same time?  What ya thinking about now?  Low odds if ever this would work?  No doubt shorting stocks and Govt. bonds at the same time would seldom pay for investors!!!

The key to his question wasn’t should you bet that way, it was “have they both (govt bonds and 500 index) declined together?”  And the answer is YES!      Since the answer is yes…when did it happen and what were the surronding macro circumstances!

Below is a chart I shared with premium members on 9/27, reflecting an “Odd” time frame where it would have paid to short government bonds and the 500 index at the same time and made money in both positions… 


Is it an odd idea to short bonds and stocks at the same time?  MORE THAN ODD… 90%+ of history its a Baaaaaaaad Idea!  So why did they decline together in 2008?  I suspect that GE1 (great escape part 1) caused investors to sell their winners after TLT rallied over 30% in a matter of months.

So how does TLT look today?  Anything like 2008?  Yesterday in the post “TWIN PEAKS” the Power of the Pattern is highlighting that TLT could be making a key double top.  See TLT update below.


I have one brain cell which leads to a very complex belief system…”if something has happened once, it could happen again!” 

The jury is for sure out if GE2 (great escape 2) will happen.  Could it pay to short stocks and bonds at the same time?  Could bond owners decided too or be forced too sell their winning holdings if the majority of their asset start falling in price/deflating?  As we all know, very few times has it paid to short both at the same time, yet their was one macro situation that it did pay off! 

Is it different this time?  Nothing is proven that this will happen again, yet stay tuned and keep an open mind to rare situations and people repeating their actions!


How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past