My near, intermediate, and longer term work are all screaming that purely from a technical perspective, the ProShares UltraShort 20+ Year Treasury (TBT) are positioned for one heck of a surprising sling shot move in the opposite direction. Ahh, but the world in which we currently find ourselves is not so neat and tidy, is it?
We have Bernanke's testimony tomorrow and Wednesday, which could hint at more stimulus in the form of bond or mortgage buying. We have continued weak economic data (today's entry was sluggish Retail Sales despite lower gasoline prices). And we have suspicions that China is gearing up for considerably more stimulus, too!
Finally, we have the unmistakeable sense that investors and fund managers remain skeptical of stocks and still friendly to bonds (remarkably)! Why? Because the bond bull market lives, and bulls love markets that continue to climb -- until they don't!
Bottom line: From my technical perspective, all of the weakness off of the June 13 recovery high at 16.22 in the TBT into today's low at 14.46 represents the final downleg of the entire bear market, which entices us to remain long in our site's model portfolio.
At this juncture, only a stock market implosion (crash) will exacerbate the current decline in the TBT's (climb in bond prices) into a vertical panic-- and while that is possible, it remains improbable. I am looking for a place to add to our long TBT positions in the upcoming hours.