 Hey everyone, this is Dan with another episode of my video on interest rates and the TMF ETF. In my video last month, I said TMF would be a good investment. Indeed, the shares of TMF that I bought since November 1, 2023 averaged 34% gain already. I believe TMF can easily double in the next year. The Fed has been raising the Fed funds rate since March of 2022 in order to reduce inflation. But since August of 2023, the Fed has kept the Fed funds rate at 5.33% because inflation rate has come down substantially from a few months ago. The Federal Open Market Committee, or FOMC, of the Federal Reserve Banks have said that they would be decreasing the Fed funds rate soon if the economic data continued to point to low inflation. Let's talk about why we can profit from this trend by buying TMF. Oh, by the way, you might notice that I'm using the Christmas colors here because if I made the right moves, I could be giving myself a nice Christmas present with the return on my stock and ETF portfolio. I hope the same can happen to you. Merry Christmas. Ho, ho, ho. The Fed funds rate is a key to our discussion here. Let's see what we know about the future of the Fed funds rate. The FOMC publishes this dot plot chart every quarter. The chart shows each FOMC member's prediction of where the Fed funds rate will be in the future. This is a dot plot chart published in September. And this is a chart published just a few days ago on December 13, 2023. As we can see, the prediction for year end 2023 came down a little bit between September and December, the same with the year end 2024 prediction and 2025 prediction. In other words, the Fed funds rate will be coming down. In a few minutes, we'll talk about how soon the rate will come down. Let's talk about the TMF ETF, which is the financial instrument that I believe will help me make a lot of profit in the next few months. TMF and its inverse twin TMV are leveraged funds maintained by Derexia. According to the Derexian definition, these two ETFs are daily 20-plus-year Treasury bull and bear 3x shares that seek daily investment results before fees and expenses of 300 percent or 300 percent of the inverse of the performance of the ICE US Treasury 20-plus-year found index. TMF is a bull ETF. That means the value of TMF will go up when the market value of the Treasury bound goes up or when the prevailing interest rate goes down. What are the top holdings of TMF? According to Derexian, 71.96 percent of TMF's holdings is TLT, which is another ETF. And the TLT ETF's top holding is US Treasuries. Let's see how the price of US Treasuries has been moving. As we can see here, the price of the 30-year US Treasury has been moving up when the Fed Funds Rate was moving up in most of 2023. As the Fed Funds Rate became flat starting in August of 2023, the 30-year rate started to go down after October 19, 2023. Looks like the market was already pricing in the future decrease in Fed Funds Rate. We see the same pattern with the 20-year rate and the same pattern with the 10-year rate. Let's see how TMF has been moving. As you can see, TMF has indeed been going up since October 23, 2023. In fact, TMF has gone up 72.1 percent already since October 23, which is certainly very impressive. If you like what you've seen so far in this video, please remember to click the like, subscribe and notification buttons. It'll allow you to get notification when I post a new video or when I send a new message day-to-day in the YouTube Community section. It'll also help with the YouTube ranking algorithm. Thank you very much. Let's continue. We have a lot of important stuff to cover. If you look at the value of TMF in the last 10 years, you can see that it peaked at 583 back in early 2020, not including the short spike in early 2020. The high value of TMF was at about 460. Its value today is 65. In other words, if TMF goes back to the early 2020 level, it'll be a 598 percent gain. Now even if it recovers just half of its value, we're still looking at potentially about 300 percent gain, which is pretty nice. Let's look into how TMF has been moving with the Fed Funds Rate. The blue line here is the Fed Funds Rate. The green line is TMF. When the Fed Funds Rate was getting reduced during the COVID pandemic in late 2019 and early 2020, TMF went up. You can see that the movement of TMF preceded the movement of the Fed Funds Rate by at least three months. When the Fed Funds Rate started to go up in March of 2022, TMF started to move down more than six, seven months sooner. Even when the Fed Funds Rate flat now in August of 2023, TMF did not reverse direction until about two months later. My conclusion is that when the Fed Funds Rate starts to go down in the next few months, TMF will certainly continue to go up and that TMF won't stop going up until at least six, seven months before the Fed Funds Rate stopped going down. So for how long would the Fed Funds Rate be going down? According to the BAP plot chart, the Fed Funds Rate will most likely keep going down until 2026 or beyond. The TMF Fed Watch Tool is not a good indication of where the Fed Funds Rate will be going. The TMF Fed Watch Tool is the likelihood that the Fed will change the federal target rate at upcoming FOMC meetings according to interest rate traders. Based on this indicator, the probability of a 0.25% rate reduction for January 31, 2024 is only at 10.3%, but for March 20, 2024 the probability is 60.5% for rate reduction of 0.25% or more. For June 12, 2024 the probability goes up to 99.6% for rate reduction of 0.25% or more. Now that we know it is very likely that the Fed Funds Rate will be going down and that TMF will continue to go up in the next few months, let's apply technical analysis to help set our trading strategies. We can see that TMF has been going up since late October and is slightly above the upper ball in Japan as of today. The RSI value is above 70, which is very high. That means TMF is overboard for now. Typically both DMI and MACD are bullish, with the Fed Funds Rate going down, TMF will certainly go up in the next few months. But from day to day I see the possibility of TMF zigzagging between the middle and the upper ball in Japan. The reason why is because if you look back to May through July of 2023 when everybody knew the Fed Funds Rate was going up, TMF was indeed trending down, but it did zigzag between the middle and the lower ball in Japan. Typically when RSI was near 30 back in May of 2023, TMF reversed direction and started to head up. Now that RSI is above 70, I won't be surprised if TMF reverses direction in the next few days and starts to head down towards the middle ball in Japan before heading up again. By the way, the increasing trade volume of TMF in the last couple months means TMF is becoming more and more popular among investors. So what are my strategies? I bought TMF on November 1st, 2023 and I bought more TMF shares on November 1st, November 16th, November 28th and November 30th. Overall, my TMF shares already averaged 34.75% gain as of today, which is pretty nice. I might buy more TMF shares at lower RSI values, so that'll be at least a few days from now if I will be buying more. Even though I expect TMF to go up in the next year, I will observe short-term ups and downs of the chart and will shrink trade some of the shares to maximize my profit. I will monitor economic data such as CPI, core CPI, PPI, unemployment numbers, FOMC, dot-plots, etc. in order to predict where the Fed funds rate will be moving. I will post in the YouTube community section and will inform my Twitter or X subscribers almost on a databases about my latest market analysis and my trades. At this point, I'd like to suggest that you subscribe to my Twitter account in addition to subscribing to my YouTube channel. My Twitter or X account is DanMarketL. For example, on November 4th, I tweeted that I bought TMF on November 1st and November 3rd because I expect the 20-year rate to go down in the next few months. And then on November 11th, I tweeted that I bought more TMF and I expected the long-term T-rays to drop in the next few months. On November 14th, I sold BX Blackstone at 6% gain and I also sold some TMF at 0.5% gain. On November 28th, I tweeted that I bought more TMF shares. Starting about a month ago, I also posted the same messages in my YouTube community section. Thank you for watching all the way to here. I'd like to remind you again to click the like, subscribe, and notification buttons. As usual, I will very much appreciate your questions, comments, and suggestions. So what are my strategies? I bought TMF on November 1st, 2023 and I bought more TMF shares on November 1st, November 16th, November 28th, and November 30th. Overall, my TMF shares already averaged 34.75% gain as of today, which is pretty nice. I might buy more TMF shares at lower RSI values. So that'll be at least a few days from now if I will be buying more. Even though I expect TMF to go up in the next year, I will observe short-term ups and downs, up the chart, and will swing trade some of the shares to maximize my profit. I will monitor economic data such as CPI, core CPI, PPI, unemployment numbers, FOMC.plots, et cetera, in order to predict where the Fed funds rate will be moving. I will post in the YouTube community section and will inform my Twitter or X subscribers almost on a databases about my latest market analysis and my trade.