Careful, just because I dont come out as a know it all in ET does not mean I started yesterday. I speak my mind whether it makes me look like a newbie or a guru, really don't give a shit.
Go back and study the basics. I repeat, "you scream CONFUSION!" note: newbie, guru, know-it-all, whatever. How is any of that important? Go back and re-read your post. You're a walking service facsimile. Formula for handling a confusion: Get hold of a single stable datum. In your case just grab one single trend that you can identify. Start from there and it will clear up.
This scenario depicted below is directly in line with the op's crash call. This crash call is a very serious thing because if its unanimous, it would mean that YIELDS, ^TNX and ^TYX etc., are going to rocket north and breakout thru' a 24-yr downtrendline. Overall, esp. if ^IRX (3-mo. T-Bill Yield) does the same breakout, its bad news for US govt.'s ability to create more debt as investors will smell a rat = yields skyrocket. That massive move up in yields from December 2008 to June 2009 looks like an impulse wave to me. If the above is true, then here's how it changes the scene for TLT, which does not have alot of historicial data so its very difficult to count the waves correctly, hence needing to use ^TNX and the rest of the gang of Yields which have long histories. TLT's Dec 2008 top could be a major wave top (i.e. a 5-wave top) So the drop from Dec 2008 will be a 3-wave move, an A-B-C. We already have the "A", we are in "B" north, when this completes we have a "C" down. C-waves are killer waves. This C-wave is = op's crash call. This then is the scenario that bothers me. TLT weekly chart showing the A-B-C wave scenario Uploaded with ImageShack.us
------------------------------------------------ see 3rd last line re: volume breakout above, then see chart above and below for the volume breakout. Real or false? Use thought-ing explained below. I've added the thick black line on right. To gauge TLT's strength or whether she is going to correct and hammer the short-timers, she must take out this resistance and then the July 1 top. See also the other trendline I've drawn from the April 6 low that TLT is right now coming up against? If she can't take this out, expect a correction. Uploaded with ImageShack.us
They can print all they want, but if investors smell a rat and start going into doubt about the US govt.'s ability to honor said debts, they will DEMAND more yield = CRASH in bond prices. This has not occurred yet, but the daily talk on CNBC about the new lows in YIELDS is showing clearly where the HERD is. This is just the type of scene BEAR loves. Hammer one investment category, the HERD bolts for another; then hammer another and they scamper again. But hehehehehe, what's there to run to AFTER /IF Bond prices collapse? There be nowhere to go. Investors will feel like the fellow in the video below ..... http://www.youtube.com/watch?v=HiIZLDeMOg0&NR=1
Be careful with your assumptions: the economy is still distinctly DEFLATIONARY. For bonds to crash, that must change. There is nothing on the horizon to suggest it will change.
deadbroke - I suggest you read MKC Global's piece - "shorting treasuries a historic sucker bet". I read it when it first came out, quite timely imo. Look at the date on the article. Have you ever considered that this treasury rally is a safe way (right now the safest way, it aint austerity either) to clean up the global excess money printing that has already taken place; rather than your other assumption, i.e that the fed needs to print.. etc... They already printed too much money, now they have to get rid of it and get rid of the deflationary effects (yes, the money printing caused excess speculation, production and misalignment in asset classes and global distortions in currencies i.e bubbles). The very thing you are critical of here is what caused the forthcoming deflationary mess in the first place. Good luck.