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.