TBF trade ideas
Yonder.. Time to dig into inverse Bond Plays. Lots of talk about the Bond Bull.
Setting my limit orders for entry at 16 or so.
Long TBF - $23.80 upside/$22.90 downside.Rates have come in quite a bit of late with the recent global growth fears. Look for them to bounce back as the slowdown in global growth isn't as bad as initially feared.
TBF heading higher: on the verge of major breakout!AMEX:TBF is poised for a major breakout of its long-term downtrend channel short term bullish wedge. As interest rates continue to rise, TBF is poised to benefit. Both the fundamentals and the chart are beginning to align. I will be taking a position in TBF sometime this week.
Interest Rates Look Bullish: TBF is the ETF to BuyOn December 20th I posted an idea for a long position in AMEX:TBF based on the likelihood of the asset breaking out of its long-term downtrend and short-term wedge pattern. Here is the link to the original idea:
Today this breakout is taking place and I am initiating a long position in TBF. Given the technical backdrop and the fundamental/economic drivers, I believe this represents a solid opportunity for alpha generation.
Initial Target Price: $25.00
Stop Loss: $21.49
TBF Weekly 25-50 MACD with a 10 WK MAWe have ended (as of Dec of last year when the Fed announced QE3, and rates went up from there), a 30+ yr bull market in bonds which began in Volcker's reign, when friends of mine were able to buy MA municipals at a 14% yield. Who knows what affect this will have on stocks? My guess is negative because this entire recent recovery in the market is based on a bottoming and beginning of a recovery in REstate prices. And those prices reflect the Cost of Money, not the cost of the property itself. If the 10-yr goes back to where it has historically traded, without QE, Fed intervention to articifically lower rates, etc., it should trade at 2-2.25%+ a risk premium, equal to the current rate of inflation (approximately 1.8-2%), or 3.8%-4.25%-in that environment the 30 yr and 15 yr, on which most mortgages are based, will trade 2-300 basis points higher than currently-i.e., at DOUBLE their current yields. What happens to a housing recovery when the cost of financing the purchase DOUBLES?
