10-Year Rate Edges Toward 'Lethal Zone'
|It was back in December, when rates on the Ten-Year Note were hovering around 2.35%, that I first projected a move to as high as 3.11%. Now, just a small turn of the screw will satisfy that target. Some seers have said that anything above 3.00% will turn the economy to sludge, but I’d prefer to see a little higher — perhaps 3.25% — before I blow taps for the aging bull market. Notice the ‘external’ peak at 3.22% near the leftmost edge of the chart. If it is surpassed by the same upthrust that reaches our 3.11% target, the move would be warning bond bulls to stay out of the way. It would refresh the impulsive energy of the weekly chart, implying significantly higher yields and lower prices for T-Bonds and Notes.
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