Monday, December 12, 2016

Bond Yields: The Big Picture

Hey now, hey now
Don't dream it's over
Hey now, hey now
When the world comes in
--Crowded House

As bond yields continue to back up, thought I'd elongate the time horizon and try to separate the forest from the trees. The chart below shows T-Note yields back to the early Eighties. This horizon captures the 30+ year (thirty year!) bull market in bonds in its glory.

What's it show? The downtrend line associated with the three decade run projects current resistance at about 3%.

Should 10 yr yields pierce the 3% level--which we must note is still more than 50 bips (about 20%) away--then the long term bull market in US sovereign bonds ends in the eyes of many technicians.

It would also end in the algorithms of many trading robots...

no positions

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