The Widow Maker Trade – Shorting US Bonds

Posted by Keith Fitz-Gerald - Dennis Gartman Comment

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SEPTEMBER T‐NOTE  FUTURES ON THE CBOT:  The trend is still rather clearly

“from the lower left to the  upper right” on this chart,  isn’t it? And yet everyone  everywhere keeps trying to  find the top. Until this trend  line is broken the top is not  it… Repeat, it is NOT in. – Dennis Gartman For a Trial Subscription go to The Gartman Letter)
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How to Profit From the “Widow-Maker” Trade – Shorting U.S. Treasury Bonds

By Keith Fitz-Gerald, Chief Investment Strategist, Money Morning

Although we’re in the midst of a U.S. Treasury bond bubble so big that pundits are calling for investors to short the government paper, resist the urge to jump in with both feet.

Doing so right now is nothing more than a “widow-maker” trade that will test both your patience and your pocket book. And yet, “shorting” the U.S. Treasury bond market is an opportunity you can’t afford to pass up – so long as you execute the trade correctly.

A T-Bond Backgrounder

U.S. Treasuries have risen an average of 2.9% this year while the Dow Jones Industrial Average has dropped 2% and the Standard & Poor’s 500 Index has declined 3% – and that’s after the best two-day run for stocks since July.

In case you’re not familiar with how yields and Treasuries work, here’s the 10-second version…..

…..read more HERE