Shorting the TLT
For months I have been reading that the fundamental analysis shows that the TLT is way overvalued. See a chart in my last post with a link...there is a long term chart and the explanation of the credit cycle.
The TLT peaks when the market panics, thus as the market bounces, TLT falls. But from an interest rate perspective, the TLT pays negative real interest. That's a screaming short. (Gold is a screaming long, but we're fighting artificial forces here)
The problem with shorting TLT, is that any market selloff pushes the price higher, as investors don't have an alternative now (they should use cash)
The technicals give it a a great risk reward entry point, short term and long term. YOu could buy puts on it, or buy TBT which is the inverse.
As I belive the market will go down, it may push TLT up....although there is overhead resistance here. But in the longer run, as real interest rates come to play, TLT should fall.