Tuesday, October 18, 2016

When to buy TMF, the 3x long bonds ETF

I have successfully traded TMF, the 3x long bonds ETF, a number of times.  It follows closely what TLT does which is the popular government long bonds ETF without any leverage.  Today, I read an article by Jeff Clark about how TLT is due for a reversal to the upside.  This means that even more money can be made with TMF since it is a triple ETF.

Jeff made some key points about TLT in his article.  He said that TLT rarely goes more than 3.6% below its 50 day average before it reverses, and that is where it is now.  Moreover, its RSI is low, and the MACD is pointing upward.  This trading situation has happened three times this year.  Therefore, we need to make money while the trade is there because it won't last since the Federal Reserve will eventually raise interest rates.


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