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Pastimes : The Philosophical Porch -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (4221)	7/14/2009 8:05:11 AM
From: Rarebird	Read Replies (1) \| Respond to of 26251

Long TLT is merely a short term countertrend play here and hedge. My target is low 100's (102-103). After the correction is complete, I expect TLT to plunge below 70 and long term rates to surge as the market rallies strongly later this summer into the early Fall. My best educated guess is that the next leg down in this secular bear market will begin late Fall 2009 and last 2-2 1/2 years into 2011-2012, with the S@P plunging to 400. The next leg down in this bear will be slow, drawn out, Chinese water torture, in contrast to the previous quick plunge the market just witnessed. It will pay to be long TLT during this period. Returns of 30% a year are nothing to sneeze at in a gruesome polar bear market. Although the secular bull market in bonds (lower rates) is over, there will be great countertrend opportunities to profit on the long side. Demand for Treasuries will increase after rates surge into the Fall and the next leg down of the secular bear takes hold.