Who doesn’t need extra cash for the holidays?

Whether it’s to pay for the Christmas tree that’s 30% more expensive this year, to buy the latest Black Ops Xbox game for the kids, or to pay for some diamond trinkets for the wife, we can all use a few extra bucks to ease the burden.

Fortunately, the market always provides. You just need to recognize the opportunity.

[ad#Google Adsense]I’ve written about this opportunity several times in Growth Stock Wire. I’ve recommended trades based on this idea to subscribers of both my newsletters (Advanced Income and Short Report). All those trades have been profitable. Now, I’m going to put it right out in the open and show you exactly how to pocket 9% on your money between now and Christmas.

It’s simple…

You must bet on rising long-term interest rates. There is no easier trade in the market today. I’ve written about it here and here. If that’s not enough, consider this my “pounding the fist on the table” moment. Interest rates are going higher. Every time rates dip down – even a little bit – is an opportunity to earn some extra spare cash.

This past Tuesday was the most recent example. Thirty-year Treasury bond yields dipped lower on Tuesday morning. The U.S. bond market rallied on fears of problems in the European Union and because the Fed jumped into the market and was actively buying longer-term government bonds. This action caused bond prices to rise and yields to fall. But as I’ve argued over and over again, any rally in the bond market is temporary. Rates are going higher.

Sure enough, much of Tuesday morning’s gains evaporated by Tuesday afternoon. And bond prices dropped sharply lower on Wednesday

So Tuesday’s brief rally in bond prices was a perfect opportunity for anyone interested in betting on the rising interest rate trend.

How could you know? Well, here’s an update of the blueprint I gave you back on November 18…

On Tuesday, interest rates performed a perfect test of the 4.1% support level. They held the level and bounced higher on Wednesday.

TBT is the stock exchange symbol for the ProShares UltraShort Lehman 20+ U.S. Treasury fund. This fund is designed to return 200% of the inverse daily performance of long-term bonds. So if bond prices drop 1%, TBT rallies 2%, and vice versa.

TBT is optionable. Traders looking to bet on rising interest rates could buy TBT call options or short TBT put options. And Tuesday’s temporary dip in the TBT share price provided a great opportunity for anyone paying attention.

The TBT January 36 call options I recommended to subscribers of the Short Report traded below $1.60 on Tuesday. Yesterday, they closed at $2.06 – a gain of almost 30% in just one day.

The TBT December 34 put options I told my Advanced Income subscribers to sell back in August for $2.08 traded as high as $0.95 on Tuesday. They closed at $0.33 on Wednesday.

By selling the TBT December 34 put options you could have made 9% on the margin requirement for the trade – in one day. Advanced Income subscribers are up 33%.

Here’s my point… Interest rates are going higher. We will not see 30-year bond yields at 3.5% again for a long, long time. So every time interest rates dip down and bond prices rise – even just a little bit – it gives traders an opportunity to enter positions and profit off the trend.

You had a chance to make 30% buying call options on TBT Tuesday, or make 9% by selling put options. Those returns go a long way toward paying for the expenses we all incur this time of year.

The trend isn’t going to change anytime soon. The bull market in bonds is over. Interest rates are going to go higher, and bond prices are going to go lower. Anytime you want to profit off the trend, you need to use the dips in yields and rallies in bond prices as a chance to get into the trade.

Bet on rising interest rates. It’s the best wager for the next few years.

Best regards and good trading,

— Jeff Clark

[ad#jack p.s.]

Source:  The Growth Stock Wire