Shoulder Shrug

I thought it was clear
The plan was we would share
This feeling just between ourselves
--Shannon

At the end of last year, we noted the potentially bullish reverse head and shoulder pattern setting up in long term treasuries. The implication at the time was that an outlook that favored inflation appeared to be increasing.

Fast forwarding to today, we can see that the 'reverse dandruff' pattern in bond yields may be in the process of being negated. Rates have recently moved lower commensurate with the stock market decline and an overall flight from risk. Plus, yields have yet to follow equities higher during the past week's stock market rally.

Perhaps markets are reconsidering inflationary prospects in favor of a more deflationary scenario. Specific to 10 yr yields, would think that any move down thru 3% (30 TNX) would be a confirmatory signal in that regard.

position in SPX