by Chris Kimble
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On May 2nd the Power of the Pattern suggested that interest rates were about to blast off. The chart above reflected a bullish inverse head & shoulders pattern in yields was in place, with the right shoulder on support (see post here).
The chart below reflects that over the past 63 days, the S&P 500 is up a mere 2%, while the yield on the 30-year bond reflects a 30% rise in rates.
Shorting bonds has made a good deal more money in the past two months than being long the S&P 500!!
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Where is the next resistance level for yields in the near future?
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The chart above reflects that the necklines have been broken to the upside and rates are sharply rising since resistance line (1) has been taken out. Premium & Sector/Sentiment Extreme members are attempting to take advantage of this rise in rates by shorting government bonds.
The above chart reflects where short-term interest rate resistance comes into play.
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