The TBT is the Ultra Short Lehman 20+ Year US Treasury Exchange Traded Fund. This security moves opposite the US Treasuries (price). There has been a massive inflow of capital into the US Treasury market. Driving this is investor fear, currency turmoil abroad and deflationary expectations. Currently, yields on US Treasuries are at almost all-time lows. The lows were hit recently during the panic environment of the 4th quarter 2008. There is a strong argument to be made that US Treasuries are incredibly overvalued/over-bought. As investor fear subside and as investors will one day regain their appetite for risk, the US Treasury market will decline. An eventual decline in US Treasuries could also be caused by worries over the US budget and trade deficits.
TBT appears to be in an uptrend. During February, TBT has been consolidating into a downward flag pattern. These patterns typically resolve by following the primary trend. A break-out above the flag pattern would indicate a "buy". A breakdown below the primary trendline would indicate a sell. If TBT breaks to upside, the target range would likely be a test and fill of the "gap created in November 2008.
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The commentary in this site is not a recommendation to buy and/or sell any security. This is for information and educational purposes only. Please consult your personal financial advisor and understand the risks when you invest.