The mother of all shorts is building: 30-year T-Bond

Well, every man and his dog has been trying to pick the top in this for the last year. But it just keeps finding support and powering higher.

Let's face it - the fundamentals of the US economy suck, the bond market is on fire, and everyone wants to fade the move. That's pretty much your classic bull market ingredients.

It's run up so much recently I'm not sure I'd want to pile in here, but buying pullbacks makes more sense to me than top-picking.
 
Quote from Susannah:

The options are extremely expensive, I was looking at using TLT as a close approximation of it (wanted to do the trade in a retirement account I can't do futures in).

I can't figure out a reasonable trade to put on if my horizon is a couple of years.
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I think you'd have figured this out without my help, since you're already looking in the right direction: <B>TBT (=ultra-short TLT) long is the play you're looking for.</b> I started buying this today in my IRA.

Hyperinflation tends to lag the printing presses by a couple years, so it could be a while before the investment bears much fruit... but TBT is sure to go parabolic (triple digits) before Obama's first term is up.
 
Quote from Rearden Metal:

I think you'd have figured this out without my help, since you're already looking in the right direction: <B>TBT (=ultra-short TLT) long is the play you're looking for.</b> I started buying this today in my IRA.

Hyperinflation tends to lag the printing presses by a couple years, so it could be a while before the investment bears much fruit... but TBT is sure to go parabolic (triple digits) before Obama's first term is up.
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Bet the name Lehman Brothers on the ETF will scare a few away.
 
picking top is fun game, only if you know how to play.

I use daily chart and tight stops, and just look over the oil chart, eventually the bond market will crack like rest of them. lol
 
I agree with those saying that it is soon and going to be massive! RFT is following it on his radar. The top is imminent.

Start the day/hours countdown folks, it could start tomorrow Friday! RFT plans to share the news with his blog readers as soon as the top gives him a call assuming he will not be busy in the battlefields. This should shake everything (currencies, stocks, commodities). It will be like a bunker buster.
 
Quote from JamesVU2000:

Im with cutten. I dont know why people keep shorting bonds.
What if the sp heads straight to 400?
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Give my some SPs at 700, and I will buy them from you anytime during this month. That is 300 profits to you!
 
Quote from Susannah:

The options are extremely expensive, I was looking at using TLT as a close approximation of it (wanted to do the trade in a retirement account I can't do futures in).

I can't figure out a reasonable trade to put on if my horizon is a couple of years.
More...

RFT covered this in an article he published on his blog (article will be extended as soon as top is timed)

Excerpts from article are:

"
There are multiple ways you can play a top in bond market:

1. Shorting TLT EFT.
2. Buying an inverse bond ETF. TBT eft is such a fund. It appreciates when prices of bonds fall (which is equivalent to saying the bond yield's rising).
3. Buying puts on TLT (but we looked at the options, and the bid-ask spread are wide, despite a good open interest. Market markets play games sometimes till rules change and force them to have a smaller minimum spread such as what happened in the penny pilot program for options on some equities such as QQQQ, and other stocks.
4. Selling calls on TLT.

"

5. Spreads (with short volatility).

Full text (and text to be added as soon as news of top breaks out are at):
LINK REMOVED
 
People should look at the inflation data and bond yields for 1931-1942 in the USA, and 1991-2003 in Japan, and consider how low they went, and how long they stayed that low, before they start making a big play in shorting bonds because yields "have to" go higher eventually.

The low in the US bond yield was made in the early 1940s, below 1.5% - a whole 12 years after the start of the Great Depression. And that was with FDR, one of the more socialist US presidents (more left than Obama definitely) in office. The low in Japanese bond yields was made in the early 2000s, it was 0.5% - that's over a dozen years after the peak of their bubble.

Now I am not predicting that this will happen again, I have no idea if it will happen - but the aftermath of prior credit bubbles suggests that it is a possibility one would be foolish to discount. If you are going to go short bonds, you need a plan for what if 10 year yields go to 1.5% or below as the US economy has a decade-long stagnation. My suspicion is that no one short bonds has such a plan, and that most are not even aware that it is possible for that scenario to happen.

Even if you are right about inflation, and the deflation scenario does not occur, you ought to consider that short bonds is a pretty crowded trade, which is always dangerous.
 
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