Update on Bonds: Jan 13, 2016

In our December update [see: Update on Bonds, Dec 3, 2015] we announced the arrival of 10-yr yields at an important level of overhead resistance.  TNX had reached a trend line that dates all the way back to 2007 (23.08.)  I noted at the time:

Remember, a retreat from this red TL from June 2007 means a correction.  Pushing above it — which hasn’t happened since, well, ever — presumably means a rally.

Despite the best efforts of TPTB, TNX was unable to push through that TL.  It even tested it twice more, but was unable to push through and, instead, broke through support several times over.

The latest was yesterday, when it broke through a short-term trend line (below, in purple) that’s only two weeks old.

2016-01-13 TNX 5 0845While it bounced back above it by the close — helping to spur a 25-pt overnight ramp job in ES — it’s not quite done.  And, yes, that means there’s more downside for stocks.

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