I'm in and out of tbt every week. Last buy was on thurs at $19.15> Am holding over the weekend. tbt can be traded successfully. I win 8 out of ten times. That being said , good luck doing a buy and hold on this one as now is not the right time. That time will come and sooner rather than later. IMO.
Short treasuries, but not using TBT. Buy 3X etn SBND because it adjusts monthly to the futures prices, not daily like TBT (less contango). Verify for yourself. Purchase in amounts that won't keep you awake at night. As the yields drop lower, buy a little more than you bought before that. Again, not enough to lose sleep over even if it loses half it's value. At some point you will catch the bottom and your entire collection of shares will be quite profitable. It's all about cycles with Treasuries and commodities.
I agree, this is a falling knife! Look at the 5-year charts and you'll see once it broke 27, it's been in a free-fall since. Given the latest news from Bernanke, it appears there's more of a chance of it falling more than settling at a bottom, since the Feds buying will continue through June 2012. Why not keep your cash and wait for a confirmed bottom--less risky :). Good luck!
In all seriousness, given the INSANITY that currently disguises itself as policy at the treasury I believe -- may God Almighty strike me dead right now if I am lying --- I honestly believe that we will see long term yields OFFICIALLY for the 20 years treasuries and longer at 1 percent before this is over. PLEASE listen to me if you have a family that depends on you. WHEN the rates turn and start to rise they will go up over and over and over in a long term AKA secular move that will go on for AT LEAST 2-3 years. Why not wait for that and still have some money left instead of trying to catch the inflection point?? I am the still small voice crying out to you from the desert of your mind. WAIT. WAIT. WAIT. I, like you, saw the opportunity in rates and bought. They HAD to go up. Rates were at historic levels. TBT was.................. 50?
I try not to think about it...................
Since fring seems to be the only one saying to NOT BUY TBT yet, let me side with him.
These leveraged funds only do well when you are in the trend. You lose if TLT stays flat for 6 months then drops. If TLT stays flat, TBT will still drop.
So the only way to make money in TBT is with rising LT rates.
What makes rates go up? The Fed does not set LT rates, in fact, they don't set ST rates either, they just set a target against which they buy/sell money to achieve that rate.
The market sets LT rates, and rising rates are a sign of demand for money, and better economic conditions.
As long as banks are flush with cash, as long as corporations are flush with cash, and as long as the economy sukz, demand for money will be low, and rates will stay very low.
I don't necessarily think LT rates will see 1%, but they are more likely to drop than rise (of any significance).
We will see QE3, the ECB will have to print Euros like mad, rates have to stay very low. They can't go that deep into debt without a commitment to do anything they can to keep rates very low.
The better thought is to wait for QE3 with dry powder, and buy AGQ. Just a guess. But I agree with fring, no TBT yet.
Look for SPY to hit 104 then I will buy calls on TBT at least 6 months out. Patience is what is needed here, but at a certain point you have to act. The FED does not control the markets completely and it is foolish to think they can. I thought the bottom was in 4 months ago, but I was not sure of it. The reward to risk could be very good in the next couple of weeks and I am not looking for the bottom. This market has to unwind at some point.
May I suggest that instead you just inject yourself with a massive dose of Athletes Foot Fungi, bathe in Maple Syrup and tie yourself down on a fire ant mound?? Did I mention the ground glass enema?