Tuesday, September 6, 2011
Bonds/Yields Update
As of the next day or so, it looks like an ideal form, time, and technical bottoming scenario for long term US bond yields. This means time to sell long-term bonds.
I will post a trade on TBT (inverse bond ETF) if/when the entry looks good over the next few days. Waiting for a break of the wave 2-4 green trendline is a safe entry, though a good indicator signal may come slightly before that.
The long term context shows spiking of bonds prices to 2008-2009 levels, but yields still well off the lows of 2008-2009 creating a non-confirmation that is bullish for yields.
From an investment standpoint then here is my analysis in a nutshell:
-get out of longer term government bonds and all "junk" bonds
-On an investment basis I have suggested being out of stocks for the last 2 years basically, and I still believe that will be shown to be wise as a longer-term suggestion (S&P 500 prices likely to go to the 900's as a bare minimum in the not too distant future)
-commodities including gold topping and entering bear market
-US Dollar set to gain against foreign currencies
So here is the non-speculative take home play: stay in cash (even literally dollar bills in a safe) or in funds of the shortest term US treasury bills which are extremely unlikely to default though they have a miniscule yield.
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