Yield Curve Model Warns Again

Over the last couple of years, the shape of the yield curve has provided some remarkably useful warnings of market turmoil.  There are numerous signals and nuances in our yield curve model. One of the most significant is when the 2s10s breaks out above resistance.

It can be seen below in the breakout above the blue trend line (which signaled the Jan-Feb correction) and again in the breakout above the red trend line (which warned us of the Sep-Dec correction.)

What might it mean, then, that the 2s10s is threatening to break out again?

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