The big stories in the financial world Wednesday centered on the bonds and the euro. The bond market issued another round of debt that wasn't received well, causing a fast rise in interest rates. At the same time, across the pond the euro came tumbling down and sent the dollar soaring. Both potentially have major implications so let's focus on one of the stories and look at how to profit from it.

When bonds decrease in price, yields rise. A rise in interest rates has a negative impact on economic activity but since rates are virtually zero that isn't really the problem right now. It's "tomorrow's problem" as they say. For now, it's more of an opportunity for traders and a short-term negative for the equity markets.

The iShares Barclays 20+ Year Treasury Bond Fund ( TLT) is the exchange-traded fund proxy for the 20-year bond.

See the weekly chart of TLT which gives us the intermediate-term time frame to consider. It is a telling chart in that the long bond has stood virtually still for three months, traveling up and down in a trading range that has measured from roughly $88 to $92.

That trading range is in danger of falling though and the failure looks to be to the downside. As you can see from the previous chart, the lows shown on this chart are critical support.

The criticality is evident on the next chart -- the long-term view.

On the monthly chart, you see that a break of support invites a drive back to the lows at $85. Now $85 might not seem like much, but that's 5%, and in bond land that's a lot. I would expect if this move unfolds and the TLT does drop to the $85 level, it will have difficulty getting through that level at first and that will probably set up the next trading range.

As for the trade, that's UltraShort 20+ Year Treasury ProShares ( TBT).

It resets daily and you get a fast move out of this instrument as a result. On Wednesday, it was up almost 4% on the day, for example. If prices move in the same direction for a few days, the TBT exacerbates that move in terms of price.

If you look at the TBT weekly chart, the $51 area appears to be the line in the sand. If it takes that area out then a test of the highs at $55 is next and then the highs of 2009 around $60 would be next.

On the TBT daily chart, you can see those swing points more clearly. Just look at the move Wednesday to understand the power of the TBT to move fast and far.

If you do not already have a position in the TBT then you need to think about averaging into to it to create the trade.

See the accompanying video for those price points and remember, just keep trading the charts!

At the time of publication, Little was long UltraShort 20+ Year Treasury ProShares, though positions can change at any time.

L.A. Little, author, professional trader and money manager, writes daily on www.tatoday.com, a free educational site for traders and investors. He has been featured in numerous publications and is the author of Trade Like The Little Guy.

His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.

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