The Triple X Treasury Bond Strategy

Diversify and Mitigate Risk with US Treasuries

In volatile markets, U.S. Treasuries can be a safe harbor for DIY investors. Unlike stocks, which fluctuate based on company performance and market sentiment, U.S. Treasuries are backed by the government, offering a very low risk of default. This makes them a stable option for reducing risk in your portfolio during downturns.

The relationship between stocks and Treasuries is important for diversification. When stocks drop, investors often move to Treasuries, pushing their prices up and yields down. This can help balance your portfolio and reduce losses in stocks, making it easier to maintain diversity even in unstable markets. Treasuries also provide a steady income, which is crucial for investors focused on capital preservation and regular returns.

The Triple X Treasury Bond Strategy enhances the benefits of Treasuries in volatile markets by applying the following buy and sell signals to the Direxion Daily 20+ Year Treasury Bull Shares (symbol TMF)):

  • Buy signals: Money Flow Index (MFI) looks for overbought or oversold conditions to find buying opportunities when Treasuries are undervalued.

  • Sell signals: Short-term price momentum is used to find sell opportunities to avoid significant declines.

The combination of the Money Flow Index (MFI) for buy signals and short-term price momentum for sell signals is effective because it uses market volume and price trends to identify the best times to buy undervalued assets and sell before significant declines. This strategy balances market sentiment and price movements for timely trading decisions.

A Word About the Direxion Daily 20+ Year Treasury Bull Shares (symbol TMF)

The Direxion Daily 20+ Year Treasury Bull Shares seek daily investment results, before fees and expenses, of 300% of the performance of the ICE U.S. Treasury 20+ Year Bond Index. There is no guarantee the fund will achieve its stated investment objectives. Leveraged ETFs seek a return that is 300% of the return of the benchmark index for a single day. The fund should not be expected to provide three times the return of the benchmark’s cumulative return for periods greater than a day.

Index Information

The ICE U.S. Treasury 20+ Year Bond Index (IDCOT20) is a market value weighted index that includes publicly issued U.S. Treasury securities that have a remaining maturity of greater than 20 years. Eligible securities must be fixed rate, denominated in U.S. dollars, and have $300 million or more of outstanding face value, excluding amounts held by the Federal Reserve. Securities excluded from the Index are inflation-linked securities, Treasury bills, cash management bills, any government agency debt issued with or without a government guarantee and zero-coupon issues that have been stripped from coupon-paying bonds. One cannot invest directly in an index.