Relentlessly this one is going to 85,  at which time it will have lost almost 40 points in a relatively short period of time when the Fed was supposed to be bying the longer maturities. At some point this will feed into the mortgage markets.

The long -bond in the US has continued to decline and now stands 30 points below the peak value. I suspect we are already on our way to 85 or so for starters as the world is beginning to realize that the money has to come from somewhere

Two months ago I suggested that despite the Feds resolve to start buying bonds directly, it was time to get out (you can view those comments by putting TLT in the search engine at the top). At the time the TLT was at 103.75 and an initial target  of 95 was suggested that could ultimately go to 83. Here we are today;

We are at 96.57, not quite to the line. That equates to about a 1% increase in yield and about $75000 per million. At this point, at least from a wave perspective there are too many possibilities to carve out a short term strategy. However, over the next few years rates are going up, not down. To understand what this means go to the PV calculator, http://www.moneychimp.com/calculator/present_value_calculator.htm   and take the rate from say 3.30% to 4.30% on any fictive amount for 100 years. The value drops from 3890 to 1484, that is the head-wind that all “valuations “ are confronted with , regardless of what it is, the rent from an apartment, the value of an annuity, a perpetual preferred share, whatever.

I am not that familiar with this ETF, however as I cannot get the actual futures , with which I am very familiar, this will have to do. As you can see from the chart , this resembles the  action of the bi-plane stunt flyers at the air-show. First vertically up and then, as momentum is lost, that is  the weight of the plane exceeds the thrust of the engine, straight back down into its own exhaust fumes. There is a big difference however, flying the plane (I should know ) is a hell of a lot cheaper than owning this stuff. Whereas you can rent a decent  (wet) Cessna for under $200 an hour at , for instance,  Buttonville airport, the bond would have cost you $200.000 per million from the top. More importantly the stunt plane has a pilot and is therefore controlled, the long bond does not have anything similar, certainly not the Fed. First to 95, then a crash landing??