For years it has seemed that many thought interest rates would move higher and they haven’t. Well of late, they sure have, at a record pace, as this week interest rates experienced the sharpest 1-day rise in rates ever.

Is the rate rally over with or just getting started? Joe Friday looks at an update on the yield of the 10-year note below.



10-year yield is testing dual resistance at (3) above, after experiencing a historical rise in rates of late.

Joe Friday, Just the Facts….Long Bond Holders DO NOT want to see yields breakout at (3). If rates would happen to breakout at (3) and run back up to the top of rising channel (1), would be painful for bonds!

Below looks at how rare the large decline in Bond ETF (TLT) has been of late-



The lower portion of the chart above measures 13-week performance of TLT over the past 13-years. TLT has declined nearly 12% of late at (2). Most of the times that TLT has fallen this hard over such a short-term time period, TLT was closer to a low than a high.

Premium Members shorted bonds at (1) in July. Now TLT is testing rising support, after experiencing a large decline of late. Shorts have been covered for members of late. With yields testing dual resistance, TLT testing support and bonds bulls are very hard to find right now, this setup from a Power of the Pattern perspective, really has our attention. This set up should bring about big opportunities in the bond markets.

If investing/trading in the bond market is of interest to you, we would be honored if you were a Premium Member.


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