The ProShares UltraShort 20+ Year Treasury (NYSE:TBT) is extending last week’s trend line break. The index has been trading in a narrow range since early August after lifting off major support near $14.50. As a new week begins, the TBT is trading above the September highs and is heading for its best close since June 23. With a major MACD divergence in place and a scooping 50-day moving average underneath, we expect the TBT to trend higher in the near-term. This is certainly good news for the banking sector. The BKX KWB Bank Sector Index is adding nicely this morning to Friday’s key upside reversal:
The TBT explained: TBT is the trader’s fund of choice for levered bets on rising interest rates. Using a combination of swaps and futures, TBT gives investors -2x exposure to daily moves in T-bonds with more than 20 years left to maturity. This gives the fund a negative duration exceeding 30 years.
Note: We are long TBT in some managed accounts.
You can read Gary S. Morrow's original post here.