Written by Rick Ackerman, Rick’s Picks
No, not Agent James Bond. U.S. Treasury bonds are waving a warning flag. I’d said bond bulls would be in trouble if this vehicle popped above 2.57%, and so it has. It tracks interest rates on the Ten-Year Treasury Note, and signs are not good.
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On Wednesday TNX breached the key threshold mentioned above, putting a possible further move to 3.11% in play. The breach of 2.57%, a ‘midpoint Hidden Pivot’ resistance, shown as a red line in the chart below, would need to be more decisive for me to say that a move to 3.11% is an odds-on bet, but I’d call it a near-certainty if the rally were to go just a tad higher, surpassing a key ‘external’ peak on the weekly chart at 2.615%, without taking a breather. We’ll probably know soon what is likely to follow, but it’s hard to imagine how a U.S. economy so completely dependent on vast excesses of credit will function if this key rate is in fact headed to 3.11% or even higher.
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