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A Defensive ETF for 2011

Hedge against falling bond prices and rising interest rates


ProShares Short 20+ Year Treasury ETF (NYSE: TBF) — This fund moves inverse to the daily performance of the Barclays Capital 20+ Year U.S. Treasury Bond Index.

The trend for Treasury prices is sharply down, supported by Fed pressure to increase interest rates. History has shown that it is usually better not to “fight the Fed,” and this investment appears to be in line with their goal to increase interest rates. 

Note the huge increase in volume in TBF and the breakout at $44 that will no doubt occur when the Fed makes its move to increase rates. 

The technical trading target is the high $40s, but this ETF should be considered a long-term holding and a hedge against falling bond prices and rising interest rates.

Trade of the Day - TBF Chart

Trade of the Day Chart Key

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