Bond Breakdown … Rates Higher

Nail, In The Coffin

If there was any remaining hope for the economy, the next leg lower in bonds (with rates higher) should just about take care of it.

Of course, if one knows what’s likely to happen, then preparations can be made.

The breakdown in bonds is already underway and this morning’s pre-market action (as of 9:08 a.m., EST) is more of the same … down.

The daily chart of bond proxy TLT, shows the wedge and measured move. With that said, there’s no guarantee of bonds heading lower, just probabilities.

Also, if bonds go lower there’s nothing that says they can’t just keep going … with rates ever higher.

Bonds TLT, Daily

Of course, one does not have to sit idly by and watch their account(s) be decimated with persistent down moves.

Leveraged inverse bond fund TBT, has been around a long time; it’s a viable tool to either hedge positions or trade outright (not advice, not a recommendation).

Leveraged TLT, Inverse: TBT, Daily

Within the past two weeks, TBT, is up over +11%, which is quite respectable for a bond fund.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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