Wednesday, March 29, 2023

Treasury Rates Rising |


The ProShares UltraShort 20+ Year Treasury (NYSE:) is extending last week’s trend line break. The index has been trading in a narrow range since early August after lifting off major support near $14.50. As a new week begins, the TBT is trading above the September highs and is heading for its best close since June 23. With a major MACD divergence in place and a scooping 50-day moving average underneath, we expect the TBT to trend higher in the near-term. This is certainly good news for the banking sector. The BKX is adding nicely this morning to Friday’s key upside reversal:

The TBT explained: TBT is the trader’s fund of choice for levered bets on rising interest rates. Using a combination of swaps and futures, TBT gives investors -2x exposure to daily moves in T-bonds with more than 20 years left to maturity. This gives the fund a negative duration exceeding 30 years.

Note: We are long TBT in some managed accounts.

You can read Gary S. Morrow’s original post here.

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