The Direxion Daily 20+ Year Treasury Bear 3X Shares ETF (TMV) is drawing attention as technical indicators suggest further increases in 30-year Treasury yields. According to Elliott wave theory and mean reversion analysis, the 30-year Treasury is entering a prolonged wave 3, potentially pushing yields up by another 50 basis points. This scenario is supported by expectations of stronger inflation data, including upcoming PPI, CPI, and import/export prices, which could drive yields past the 5% mark. Rising yields typically signal declining bond prices, aligning with TMV's strategy of providing leveraged inverse exposure to long-term Treasury bonds.
As yields rise, investors may shift their focus from equities to bonds, seeking higher returns amid expectations of tighter monetary conditions and increased capital costs. This shift could impact stock markets negatively, as higher yields often reflect anticipated interest rate hikes or inflationary pressures. The TMV ETF, designed to capitalize on falling bond prices, stands to benefit from these market dynamics.
TMV is currently trading at $42.63 as of 09:42 on January 10, marking a rise from its last close of $41.65. The ETF reached an intraday high of $43.04, matching its 52-week high, as investors react to the potential for continued increases in long-term Treasury yields.