Here’s the magic number: 124.07. That’s the number you need for shorting U.S. government debt.

In my DailyWealth column April 13, I said if the long bond fell below 124.07, it would signal a bond bear market. Well, the long bond closed at 123.26 last Tuesday and is now making new five-month lows…

The "long bond" is the nickname for the 30-year Treasury bond. It’s the longest-dated debt instrument the U.S. Treasury issues. And on March 18, the Federal Reserve announced it would buy $300 billion "longer-dated" Treasury bonds.

This was the news the bond bulls had been waiting for. The world’s most powerful central bank was going to pump $300 billion into their market over the next six months.

Long-bond investors must have thought they were about to get rich… but the market didn’t oblige. There were too many sellers.

To make successful short plays, old-time traders will tell you, "Throw your rocks into the wettest paper bags." The long-bond market is a wet paper bag. The long bond is so weak, not even the Fed’s printing press can hold it up.

If you own any long-dated Treasury bonds, sell them now. This market is in danger of imminent collapse. The next major stop for this market is 112.5, the lows of 2008. Take a look…

To watch the action in the long bond price, use the iShares Barclays 20+ Year Treasury Bond fund. The symbol of this fund is TLT. This fund is a giant basket of long-dated Treasury bonds. It’s one of the largest and most liquid ETFs in the world. The movements in this fund represent the movements in the long-bond price.

Right now, TLT trades at about $97. As long as TLT is trading below $100, assume the long bond is in a bear market and the path of resistance leads to lower bond prices.

Good investing,

By Tom Dyson
Daily Wealth