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Looks Like More Short Term Pain for the TBT

|Includes: ProShares UltraShort 20+ Year Treasury ETF (TBT)
In light of the disappointing September nonfarm payroll figures reported yesterday, I’m afraid that my recommendation to buy the Proshares Ultra Short Treasury Trust (NYSEARCA:TBT), a bet that US Treasury bonds are going down, is starting to look a little green around the gills. I first recommended the TBT at the beginning of the year (click here for report ), catching a nice run from $35 to $60, and then told investors to bail at $60. I have since advised readers to start scaling back in around $45. It traded down to $43 yesterday and is at risk of turning from a trade into an investment. Of course, the fundamentals behind the TBT are still as valid as ever. Treasury bonds are without a doubt the world’s most overvalued asset, and the only political certainty we can count on is the continued exponential growth in the supply of government bonds of all maturities. Like all Ponzi schemes, their eventual collapse is just a matter of time. But as the noted economist, John Maynard Keynes, liked to remind his students, “Markets can remain irrational longer than you can remain liquid.”  Better to live to fight another day. If you have the TBT, keep some mental stop losses under the markets, as ETF’s don’t offer owners the real thing. If the economy does enter the second half of a “W,” the sushi could really hit the fan. As for me, I’m never wrong, just early. Sometimes way early.