Drawn into the stream
Of undefined illusion
Those diamond dreams
They can't disguise the truth
Ten year Treasury note yields closed the week above 3%--the first time they have done so since July, 2011.
The previously observed cup-and-handle pattern on the weekly charts is now more pronounced.
Bulls argue that higher yields are simply a signal of economic strength. Bears counter that the Fed is losing control of interest rates despite its aggressive policies aimed at suppressing rates.
What we do know is that there are huge leveraged positions in Treasuries that are feeling increased pain with each tick higher in rates (bond prices go down when yields go up). If rates should break decisively higher from here, then get ready for some fireworks.
Blend that with lopsided sentiment and you get a high risk mixture.
position in SPX