Treasury Yields Jump Sharply

12/08/2010 10:13 am EST

Focus: ETFS

Thomas Aspray

, Professional Trader & Analyst

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The yield on the ten-year Treasury note jumped sharply on Tuesday, closing above the declining 200-day moving average (MA). There is two-year resistance in the 3.90% area with the 16-year downtrend now at 4.25%. Since 2008, hundreds of billions have moved into bond funds, but in mid-November, money moved out of bond funds for the first time in 99 weeks. Most of these bond buyers should still be in the black, but this could change if yields rise above 4%. Those betting on higher yields could look at ProShares UltraShort 20+ Year Treasury (TBT), a double-inverse ETF that profits from weakening bond prices.

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