Rates Bottoming

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Plunging interest rates (and Yellen’s little scheme from mid-March) have been the gasoline powering this rally. It is therefore important to watch for any kind of inflection point. The TBT (ultra-short fund based on bonds) is getting close to a crucial price gap, which in my estimation could be such a pivot point.

Conversely, TLT itself is approaching a major price gap (that horizontal magenta line) which could be a key barrier to further price strength.

If, months from now, we look back upon this and see a hard reversal away from this right triangle pattern, I believe that will go hand-in-hand with a resumption in equity weakness.