I took a stab at charting the recent moves of TBT to see what the future may hold for bonds. From a wave standpoint, I wouldn’t necessarily call TBT “bullish”, in fact it shows signs of waning its upward move and looks corrective. A rising wedge should never be ignored.
Hey Dan, et al, if you want a fundamentals view to back this up listen to Gary Dorsh on FSN this weekend. Dan says this rise was largely due to a fakeout move by the Fed, i.e., talking the talk, but not walking the walk on quantative easing. As a result lots of bond speculators got burned trying to play “flip this bond” to the Fed. It’s a great interview and it makes perfect sense.
http://www.financialsense.com/fsn/main.html
I believe there will be at least a 50% retracement here. a round of falling rates with one more flight to safety combined with some profit taking could be significant here. I doubt I’ll sell any (in at 37). I’ll hold thru inflationary period in a yers or two and get out int he 80 – 90 range!
If this is a rising wedge, than as a rule, they retrace greater than 50%. In fact this would be a countertrend which suggets that eventually your $37 entry would be taken out on the downside and new lows will be made.
Thats just from the charts.
Don’t count on inflation or that $80 target.
I’m just glad that I confident about how much I disagree with the above.