The chart above looks at the yield on the 10-year note (TNX) “Inverted.” The 10-year yield has remained inside of rising channel (1) for the past 25-years and rising channel (2) for the past 10-years. Will the Plunge Protection Team come to the rescue at (3) and keep the channel from breaking?
Below looks at the same chart without inversion-
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The yield on the 10-year note is testing the top of its 25-year falling channel as well as its 10-year falling channel at (1). The last “two times” the yield cam near or touched the top of this channel was in 1999 & 2007.
If history is any kind of a guide, the test of resistance at (1) might end up being important for stocks as well as bonds! Last couple of time the top of this channel was hit, out of favor TLT did ok. We will see if its different this time!
Plunge Protection Team to the rescue??? The Power of the Pattern believes some very important inflection points are in play friends!!!