Flash the message 'There's something out there'
--Nena
Treasury bonds have been caught in the Fed's vice. On the one hand, QE2 means that the Fed will print $900 billion out of thin air, which is inflationary (bad for bonds). On the other hand, the Fed has pledge that the printed proceeds will be used to buy Treasuries (good for bonds).
For the last couple of weeks, the inflationary side of the vice has been winning, as long bonds have been hammered.
Selling has resided in the last couple of days, and charts give some indication of exhaustion and pending trend reversal. Not a bad entry point for a long side try...
position in TLT
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If the great Government of the United States were a private corporation no bank would take its name on a piece of paper, because it has cynically repudiated the words engraved upon its bonds.
~Garet Garrett
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