The chart above is probably one of the most important charts in finance today. As you can see, the 10-Year Treasure Note is pushing against a fairly significant short-term resistance level at around 2.25%.
Should it break out, it is likely to reach at least 2.6%. Its long-term resistance level. This brings out a number of important questions. In fact, more questions than anyone can answer at this point. For instance,……
- Was the secondary bottom in yields set in early January?
- Will yields now stage a multi-year, even a multi-decade advance?
- Is this signaling the FED will raise rates and soon?
- Does this spell doom for the stock market?
- Etc….
Only time and market action can answer the questions above. At least for now, I am sticking to my overall long-term forecast. The secondary bottom in yields of 1.4-1.5% is not yet in and we are on schedule to see it over the next 12-24 months. If the yields don’t turn around and resume their decline at today’s resistance levels, I fully expect 2.6% resistance line to stop any long-term advance.
