TMV ETF

Initially rated Direxion Daily 20+ Year Treasury Bear 3X Shares a 'Buy' in 2022, yielding 65% and 51% returns since commentaries, but downgraded to 'Hold' in 2023 due to time decay risks. Leveraged funds like TMV suffer from significant time decay in consolidating markets, requiring active trading rather than holding. TBF's recent MACD buy signal and golden cross indicate an upcoming bullish trend, prompting an upgrade of TMV back to 'Buy'.

Direxion Daily 20+ Year Treasury Bear 3X Shares ETF is a leveraged ETF that takes a 3x position against long-dated Treasuries. Inflation expectations remain high, meaning that inflation will necessarily remain high absent major aggregate demand pressures. TMV could be an appropriate speculative play on Powell's upcoming speech on Monday, which will likely affirm a hawkish tone, as the Fed will see clearly inflation isn't falling enough.

TLT poses risks because of market volatility, while TMV could be a good option for hedging against TLT long positions. TMV is a triple inverse daily ETF for TLT, with triple the volatility. It may perform well in the short term and potentially offer a good dividend. Managing TMV trades involves monitoring volatility, using it as a hedge, and selling covered calls for additional income.

Bond investors who were bullish are now facing a longer-than-anticipated period of higher interest rates as we move into 2024. The increase in Treasury yields is causing bond prices to decrease, but it is also leading to a rise in inverse exchange traded funds (ETFs).

Stubborn and sticky inflation is keeping yields elevated again while pushing down bond prices. Of course, this opens up pathways for traders to gain from falling bond prices via inverse exchange-traded funds (ETFs).

The start of 2024 has been marked by record issuance in bonds both in the public and private sectors. But as fresh supply hits the bond market, prices have been dipping as of late.

The Direxion Daily 20+ Year Treasury Bear 3X Shares ETF is a leveraged ETF that takes a 3x leveraged position against high-duration Treasuries. Leveraged ETFs have unintuitive behavior and value erosion due to daily resetting, making them risky, speculative and peculiar, although more appropriate in short bursts. There is a case for downside to long-duration Treasuries and that next week's data releases and Fed comments may provide catalysts for TMV to rise.

Direxion Daily 20+ Year Treasury Bear 3X Shares has delivered strong returns, up almost 51% since August 2021 and 36% since March 2022. Holding leveraged funds like TMV for a sustainable period of time when wrong on direction is always the wrong decision due to elevated risk. Rising inflation in the US, fueled by higher oil prices, suggests more tightening by the Fed, putting pressure on bond prices over time.

With the expectation that rate hikes will be dissipating, fixed income investors may start to look at long-term Treasury debt again. However, hedge fund titan and Pershing Square Capital Management founder Bill Ackman said the opposite.