NFTRH+; Long-term Yields and the Market Rotations Tied to Them

We have managed the 30yr yield Continuum all the way up to the caution area (2.5% to 2.7%). I believe that there will likely be higher to go in yields out ahead, but with everybody on the inflation theme and by extension the bond bear/rising yields theme an interim cool down can come at any point.

Here is the 30yr yield’s daily chart. This week’s bump up has not made a higher high, it is in a funky short-term pattern and there is a negative divergence on RSI. Given all the attention by the public and other contrary indicators the time could be right for an interim pullback.

And if a pullback were to come about recent beneficiaries of the reflation trades like Banks and Energy, which happen to have very similar short-term patterns to the yield itself, would be vulnerable to under-performance during a pullback in long-term yields.

Here’s the Energy ETF with its very similar pattern.

Meanwhile, Tech & Semi have an inverse look to them on the short-term patterns. QQQ is still below the SMA 50 but SMH is trying to take it out.

Also note that gold would prefer that yields not keep rising. But gold is its own animal, late in a correction. It is bouncing today but is obviously still vulnerable. A continued pullback in yields and rally in bonds would eventually support gold in my opinion. But right now it is being puked left and right by last year’s momentum players who jerked into gold for the wrong reasons. But the bottom line on gold and gold miners for me at least, is that we may still anticipate a final capitulation although counter-trend rallies can and will happen. Like today for instance.