Now that QE3 is here we have to talk about the elephant in the room; Treasury bond yields and Treasury bond prices. The purpose of QE3 and Operation Twist is to lower yields. Will it work and is there an investment opportunity?
The Federal Reserve is buying Treasury bonds (more via Operation Twist than QE3). According to the law of supply and demand this should result in higher T-bond prices and lower yields.
This video looks at the historic effect QE and Operation Twist had on 30-year Treasury prices (cause and effect) and identifies the next high probability trade set ups.
ETFs that track long-term Treasuries are the iShares Barclays 20+ year Treasury ETF (TLT) and its double inverse cousin, the UltraShort 20+ year Treasury ProShares (TBT).
Continuous analysis of long-term Treasuries is provided via the Profit Radar Report.