Because the Fed has been the single most influential and active buyer of long term bonds, investors have been thinking about the possibilities of SHORTING long term bonds, in anticipation of weaker bond prices going forward as the Fed steps away from its active purchase program.  This is a reasonable proposition.  Unfortunately, the chart of the long term bonds has shown recent strengthening in price, BUT not tremendously so.  In fact, its rather clear that while yields have stayed low, bond prices are LOWER than they were when QEII began!  The U.S. Treasury’s chart does NOT look like the steady and then exponential run-up of silver – which we took advantage of at the beginning of May.  Another difficulty presented in shorting long term bonds is that at each negative geo-political event that arises, global investors seek the relative safety of U.S. Treasuries – driving the prices higher.  We see this particularly clearly in the recent spike in U.S. Treasuries during this current dilemna related to funding Greece’s sovereign debt.

For those still desiring however to SHORT U.S. Treasuries, we would like to point out this handy investment instrument = The ProShares UltraShort 20+ Year Treasury (Closed-End Fund) Fund.  Ticker = “TBT”.  This is a 2:1 geared inverse fund that increases in price as the price of bonds decreases. We see a possible “higher-low” forming on this fund, offering a potential entry – driven by some possibilities related to the end of QEII, and also driven by bond holders considering re-entry in stocks as risk becomes more acceptable, now that stocks have sold off over the last 6+ weeks and longer – when considering many individual stocks peaked in mid-February.

– Click left here for an SMC WEEKLY Chart of the “TBT” –

If the market can remain strong from here, we like these stocks –

Apple, Inc. (AAPL)

Research in Motion (RIMM)

Hewlett Packard Co. (HPQ)

Green Mountain Coffee Co. (GMCR)

Oncothyreon (ONTY) – on a pullback.

ZAGG Inc. (ZAGG)

Amarin Corp. (AMRN)

Beaten down financials like American International Group (AIG)

Ford Motor Co. (F)

And others…  Quite possibly = Nokia (NOK); Simple Tech (STEC); American Eagle Outfitter (AEO)

At the Stock Market Companion we do not and cannot give individual investment advice. According to the State of Washington RCW 21.20.005 the Stock Market Companion is not a Registered Financial Advisor and we do not render any advice on the basis of the specific investment situation of a particular individual. This information is for a wide readership and is not intended for any particular individual,  and under no circumstances should our Market Update or Watchlist be considered an investment recommendation or plan for any specific individual.  By accessing this material, you agree that the Stock Market Companion will not be held liable for any actions taken by a subscriber or other parties.  Please seek the counsel of a broker or other licensed investment professional for accurate pricing and concerning the suitability of all investments that you may be considering. Disclosure : You understand that the Stock Market Companion holds positions in the above mentioned securities.  Based on market related or personal events these positions may change without notice.

---