Ride the TLT to 17% Profits as the Fed Slashes Rates
Mar 19th, 2009 | By Charles Delvalle | Category: Chart of the DayYesterday, trigger-happy Fed head Ben Bernanke made it clear that he was on a mission to push long-term interest rates down to ‘stimulate’ the economy. This is a chance for you to make up to 17% profits. Let me explain…
As interest rates go down, bond prices rise. So all you need is an instrument that rises alongside bond prices to make money.
That instrument is iShares Barclays 20+ Year Treas.Bd ETF (NYSE:TLT)
As you can see from the chart above, after yesterday’s Fed announcement the TLT roared higher. And after making a move that massive – which is quite unprecedented in the bond market – today it consolidated some of those gains.
But don’t let today fool you.
Ben is crazy. And he’s going to do whatever it takes to push long-term interest rates down.
He’s already proven that by announcing a $300 billion Treasury buy-back that will happen over the next six months.
As a result of Bens “crack headed” antics, we should see the TLT reach and even surpass the December peaks of around 122.
If you buy the ETF, that’s a potential 17% move. If you buy the right short-term option, triple-digit gains are definitely within reach.
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Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth".
