Home > charting trendlines, Financial Ponzi, investing, stock chart breakdown, technical analysis > QE3: Stocks Breakout and Treasuries Breakdown

QE3: Stocks Breakout and Treasuries Breakdown

Well, we have lift-off.  Who knows how long it lasts, but it’s definitely at hand.  While stocks and commodities surge higher, I am even more intrigued by the breakdown in Treasuries.  I think it’s pretty funny that Bernanke jawbones about how “lower interest rates” are a goal of QE when – it seems pretty to clear to me – that they are not.  Higher stock prices is the goal.  The breakdown in TLT is pretty epic.

I expect that somewhere in the coming months we start to relive the 2007-2008 scenario, where broad indexes start to decline as higher commodity prices and higher interest rates squeeze consumers.  The higher commodity prices will likely lead to significant political unrest as well, perhaps upheaval.  Except this time, the Fed will already have it QE spigot on full blast.  TBT has lost a lot of folks a lot of money, but may finally be a decent play.

It’ll be interest to see how this plays out – i.e. epically unravels.

I wrote a longer article about the short-TLT play for Seeking Alpha, here.

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