Interest Rates

May 25, 2009 - I would like to get short again, but the T-note did not bounce up to the level I was looking for. It was a sign of weakness, and we have now seen that weakness play out as T-note prices have collapsed.

It would not be unreasonable to sell short here, but I don't recommend that. I do not want to chase this trade. So for now, I recommend that traders stay on the sidelines.

I have been noting in recent letters that the odds have been improving that December's top in the price of long-term US government debt instruments is their final peak. With each passing day, that top looks more and more certain.

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