Stocks - TBT, TMV are buy
Aug 19, 2010, CBOE - Volatility Index (VIX) closed today at 26.44 up by 7.52%. Even the market is currently in a short term correction phase, I expect the rally in long term Treasuries may end sooner than the equity market correction.
TLT - iShares Barclays 20+ Yr Treas.Bond closed today at 106.16 up by more than 5% in the last 5 trading session. I think market is over reacting and buying more long dated Treasuries. But we are no where near a bubble.
However due to the recent surge in long dated Treasuries, the bear fund on long dated Treasuries are becoming very attractive.
TBT closed today at 31.62 and TMV closed today at 34.40. Both are OK to start buying. Even it may go lower as equity correction is not yet complete, it is good to start accumulating shares of TBT or TMV.
We can expect a short term bounce in TBT and TMV by around 10% - 15% shortly. It may not be a good long term investment at present.
It is important to note that these are leveraged ETFs. Leveraged ETFs may not be suitable for all kinds of investors as it posses high risk if the market direction is not favorable to you. Also refer to my earlier articles on leveraged ETFs.
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Option Price Calculator - Posted on June 05, 2010
Be careful when trading Leveraged ETFs!