Long Term T-Bonds are Way Below the Green Line, and could be forming a “W” or Double Bottom pattern.
The FED is putting on the brakes to slow down Inflation and the Economy. They do this by Tightening the supply of money (raising short term Interest Rates).
But long term T-Bonds LOVE a weak Economy and lower Inflation, so investor demand of Bonds should increase (and the yield on T-Bonds should drop).
The FED only controls short term Rates and many investors don’t understand that FED Tightening is usually Bullish for long term T-Bonds.
Since we know that Bonds will eventually return near the Green Line, some investors will bet on a Double Bottom or “W” pattern of the TLT Bond Fund below, with a Sell Stop below $106.
But buying investments Below the Green Line have more risk, and are generally slower, so we will WAIT for TBT (Inverse Bonds) to correct and Buy them again.
