10-Year Treasury Note Overbought

The 10-Year Treasury Note got to 11.3% above its 50-day moving average yesterday. As shown in the chart below, there have only been five other periods where the Note has gotten 10% above its 50-day since 1977. The most overbought was 15% back in 1980, followed by 13.7% in 1982, and 12.5% in 1986. Since 1986, the 10-Year hasn't gotten anywhere close to as overbought as it is now.

If there's one thing we've learned in this market, it's that securities can stay overbought or oversold for long periods of time. If you're looking to play the downside in the 10-Year, however, ProShares offers a double short ETF for 7-10 Year Treasuries with the ticker PST.

click to enlarge

Comments

[buyitcheap:]

Same is true with TBT on the 20 year side. I cannot believe how people are paying $128 for a $100k bond. Unless someone,the FED, was going to buy it back at those prices... The market can truly stay irrational longer than you can stay solvent.

2008 Dec 03 02:16 PM

[Pipo:]

Jim Rogers has been shorting Treasuries for a long time. He says america is bankrupt and its debt worthless.

www.jimrogers-investme...

2008 Dec 03 06:12 PM

[novice_inve...:]

Are there any criteria for choosing between PST and TBT? TBT seems to be down a larger % than PST. Thanks.

2008 Dec 04 12:31 AM

[Pipo:]

Do yoou have that analysis for the 30 year bond?

2008 Dec 04 06:24 AM