We have watched every step of the way as the 10yr yield hit and now crossed through its target of 2.9%. But what of the big daddy, AKA the 30yr yield, AKA the Continuum ™?
Check out the bullish looking pattern on the daily chart. Sure, it’s below the 3.3% target but the theoretical measurement is around 3.5%. A caveat is that when I highlighted bullish daily patterns and upside yield targets last October the market of course reversed the yields before getting back on a rising track a few weeks later.
As if its ears were burning in checks the 30yr yield Continuum advising that we are indeed still below the limiter but that if the daily chart’s upside is exercised we will not only be above the lateral resistance of the 2015 and 2017 highs, but also said limiter.
This is a picture telling us why certain macro market outcomes may not be easily extrapolated from the previous decades of history. It is a picture telling us that as long as we are within limits sure, go ahead and extrapolate. But if a thing happens in something as important as Treasury yields that has not happened in all these decades it would be illogical to robotically and conventionally extrapolate previous experience. It would be a rabbit hole.
Here, let’s dial the same chart out to the 1980s to make the point of what a strong backbone this has been to all that has taken place in the macro markets over that span.
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