Sell Muni Bonds And The Treasury ETF TLT
Wednesday, 16. January 2008, 17:57:44
The closed end municipal bond funds VGM, EIM, BKK, CXE and PZC manifested as topping out today: take for example VGM, it presented a weak up doji; and EIM presented the lollipop hanging candlestick; the 30 Year US Government Bond ETF, TLT, manifested as bearish engulfing; the 10 Year Treasury ETF, IEI, manifested bearish harami.
A downturn in municipal and treasury bonds appears to be at hand.
It appears that the Bond Market place may be on the verge of declaring a defacto interest rate hike independent of Federal Reserve action in response to the report that inflation surges at it's worse level in 17 years (Martin Crutsinger of the Associated Press)
The investment application is to dollar cost average sell -- buy puts of the ETF TLT; as well as to sell immediately the closed end municipal bond funds VGM, EIM, BKK, CCE and PZC.
For all practical purposes, the municipal bonds are no longer insured as their guarantors, AMBAC, and others have ongoing financial difficulties. When this loss of premium is perceived by the investing public, the fall in value will greatly reward those who are short.
The U.S. Dollar is up today, but manifesting in a head and shoulders pattern, a further fall seems imminent; when the U.S. dollar falls below $75 then Moodys and others are likely to cut the U.S. Treasuries current AAA rating, which will lower the value of the Treasuries, greatly rewarding those who are short.
Another factor favoring shorting of bonds is that the yield curve is seen steepening; this implies inflation; and is a reason for having a gold ETF (GLD) portfolio and using a small amount of margin credit to short bonds of all types. One should be aware that gold may fall from $867; it's possible that gold will fall to $840 and even $820 before it continues on to a likely target of $1,600 or $2,000 as suggested by Alf Field in Kitco.com article Elliot Wave Gold Update 17.
Charts
The municipal closed end mutual bond funds VGM and EIM manifest bearishly.
The 20-30 Year U.S. Treasury Bond ETF manifested bearish engulfing today; a reversal in trend appears imminent.
The 10 year US Treasury Bond manifested bearish harami.
The Aggregated Bond ETF manifested the lollipop hanging man candlestick yesterday and bearish engulfing today; this indicates a market turn lower for all bonds.
The Yield Curve is see steepening suggesting both inflation and inflation; and also suggests the wisdom of investing in gold
When the U.S. Dollar falls below $75; Treasuries are likely to loose their AAA rating.
AMBAC can no longer be considered a going concern; and viable insurer of anything as Mike Mish Sheldon reports Ambac Slashes Dividend and Reports Loss of $32.83 Per Share
Gold traded off today; but soon is headed much, much higher.
Related Articles:
Inflation: It's A Bond Killer And A Gold Thriller
Was Today The Day That Higher Interest Rates Took The 30 Year Treasuries Lower?
A downturn in municipal and treasury bonds appears to be at hand.
It appears that the Bond Market place may be on the verge of declaring a defacto interest rate hike independent of Federal Reserve action in response to the report that inflation surges at it's worse level in 17 years (Martin Crutsinger of the Associated Press)
The investment application is to dollar cost average sell -- buy puts of the ETF TLT; as well as to sell immediately the closed end municipal bond funds VGM, EIM, BKK, CCE and PZC.
For all practical purposes, the municipal bonds are no longer insured as their guarantors, AMBAC, and others have ongoing financial difficulties. When this loss of premium is perceived by the investing public, the fall in value will greatly reward those who are short.
The U.S. Dollar is up today, but manifesting in a head and shoulders pattern, a further fall seems imminent; when the U.S. dollar falls below $75 then Moodys and others are likely to cut the U.S. Treasuries current AAA rating, which will lower the value of the Treasuries, greatly rewarding those who are short.
Another factor favoring shorting of bonds is that the yield curve is seen steepening; this implies inflation; and is a reason for having a gold ETF (GLD) portfolio and using a small amount of margin credit to short bonds of all types. One should be aware that gold may fall from $867; it's possible that gold will fall to $840 and even $820 before it continues on to a likely target of $1,600 or $2,000 as suggested by Alf Field in Kitco.com article Elliot Wave Gold Update 17.
Charts
The municipal closed end mutual bond funds VGM and EIM manifest bearishly.
The 20-30 Year U.S. Treasury Bond ETF manifested bearish engulfing today; a reversal in trend appears imminent.
The 10 year US Treasury Bond manifested bearish harami.
The Aggregated Bond ETF manifested the lollipop hanging man candlestick yesterday and bearish engulfing today; this indicates a market turn lower for all bonds.
The Yield Curve is see steepening suggesting both inflation and inflation; and also suggests the wisdom of investing in gold
When the U.S. Dollar falls below $75; Treasuries are likely to loose their AAA rating.
AMBAC can no longer be considered a going concern; and viable insurer of anything as Mike Mish Sheldon reports Ambac Slashes Dividend and Reports Loss of $32.83 Per Share
Gold traded off today; but soon is headed much, much higher.
Related Articles:
Inflation: It's A Bond Killer And A Gold Thriller
Was Today The Day That Higher Interest Rates Took The 30 Year Treasuries Lower?
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