The yield on the 30-year bond (TYX) may have created a double bottom in July, matching the financial crisis low in yields (see inset chart above).  Since then the 30-year yield may have created a “Bullish inverse head & shoulders” pattern.

Over the last couple of months yields look to be forming a bullish ascending triangle at (1) above. The spike in yields above the ascending triangle took place the “day QE3” was announced!

These patterns have not proven themselves, yet the potential that they are correct is there. I don’t know about you, I am surprised that yields haven’t fallen more of late, along with the stock market!

A breakdown of the ascending triangle would greatly reduce the idea of the inverse & head shoulders pattern in yields!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past