Bearish Signs Mount As The Bottom Drops Out of ProShares UltraShort 20+ Year Treasury (TBT)

(This is an excerpt from an article I originally published on Seeking Alpha on May 15, 2012. Click here to read the entire piece.)

So much for that bottoming process in ProShares UltraShort 20+ Year Treasury (TBT) that I noted two months ago (see “Looking Like A Bottom For TBT“). Interest rates are headed lower again on U.S. Treasurys. This has occurred despite common and often-stated expectations earlier this year that stronger economic data in the U.S. would slowly but surely lead to higher rates. It was against this backdrop I blithely assumed the bottom was finally in for TBT. Now, TBT is breaking down, and iShares Barclays 20+ Year Treas Bond (TLT) is breaking out.


TBT breaks down as Treasury yields decline again
TBT breaks down as Treasury yields decline again


Since TBT is breaking down, TLT is of course breaking out
Since TBT is breaking down, TLT is of course breaking out

The prospects for reversing these moves seem relatively dim as a steadily rising U.S. dollar index accompanied by a sinking S&P 500 seem to both confirm the growing momentum in fear. {snip}


U.S. dollar index slowly creeps higher and breaks out from recent downtrend
U.S. dollar index slowly creeps higher and breaks out from recent downtrend


The S&P 500 has that sinking feeling
The S&P 500 has that sinking feeling

Finally, it seems increasingly clear that munis will NOT be the rock of choice for fearful investors to use for hiding. {snip}


The upward trend seems to be ending for the iShares S&P National AMT-Free Muni Bond Fund
The upward trend seems to be ending for the iShares S&P National AMT-Free Muni Bond Fund

Source for charts: FreeStockCharts.com

{snip}

Be careful out there!

(This is an excerpt from an article I originally published on Seeking Alpha on May 15, 2012. Click here to read the entire piece.)

Full disclosure: long TBT, SDS, SSO calls

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