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Two Ways: Treasuries Burst Investors' Bubble


Strengthen your portfolio in good times and bad.


Good Times for Treasury Bears

The top story in Barron's this weekend: The bubble for US Treasuries has burst - and the outlook isn't pretty. Long-term Treasury prices have plunged by about 20%, causing yields to jump from 2.82% at the end of 2008 to around 4.10% currently.

Investors flocked to quality last year as the global recession took hold. But bullish enthusiasm has since returned to the equity markets and some parts of the credit markets. Nonetheless, some think yields on 30-year- and 10-year notes could rise to more than 5% and 4% respectively within the coming year.

See Why Commercial Real Estate Can't Be Save by Professor James Anderson.

From the Bull Pen: Bulls can look to gold stocks for upside exposure. Is the Goldminers ETF (GDX) ready to have a sustained breakout above $39 resistance? Those bullish can set a sell stop near $36.

From the Bear Cave: Treasury bears can continue to play the Ultrashort 20+ Treasury ETF (TBT). A sell stop can be set 2% below entry. Another stock to consider is the DJ US Real Estate ETF (IYR). For downside plays, a buy stop can be set near $32-$33.

Quick Check Around the World

Asian trading closed with the Hang Seng 1.37%, India 17.34%, Nikkei -2.44%, Shanghai 0.28% and Taiwan 1.37%.

Glancing towards Europe, we see the CAC 0.09%, DAX -0.11%, FTSE 0.62%

As of 8:15 AM EST, S&P Futures are trading +7 to 889.00, and Nasdaq futures are +10 to 1364.00.

A Look at Commodities

Over in commodities, crude oil is trading +1.22 to 57.56 while gold is -2.20 at 929.10 this morning. Silver is -0.190 to 13.82 and copper -1.20 to 201.60.

The dollar index is -0.2800 to 82.8700.

Light week ahead. No events today but click here to see the full trading radar.

Welcome back and have a great day!

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