Well, if I am going to put my money where my mouth is, I am going to be long IEF and SKF because my mouth is saying that there will soon be an end to the relief party now in progress and a deflation impulse is forthcoming.Actually, as noted to subscribers I am long SKF for a modest position since last week (NOT a recommendation of any kind) and as of yesterday's treasury market silliness and after reading all kinds of bond market contrary indicators in the financial media, I am long an asset that is continually denigrated here on the blog, IEF, holder of all those 7-10 year treasury bonds. I figure now that Lyin' Larry has got everybody off sides, it's worth a poke for a perhaps extended trade to see if we can't reel in some bond price increases while collecting dividends with money just sitting there. The position is also modest in the grand scheme of things.
Here is a chart showing both of these 'deflation scare' vehicles, one getting trounced (SKF) and one doing great (IEF). IEF's gain and SKF's loss are balancing out today, considering the relative amounts of each that are held. BTW, please do not take IEF as a recommendation either because the blog has not seen detailed analysis of the parameters I am using which, if violated, will unwind both of these trades so fast your head will spin.
