What a 100-year chart says about interest rates now

From Kimble Charting Solutions:


The chart above is a 100-year look at yields on AAA Corporate Bonds. A couple of things jump out at me…

Yields remain inside of a well-established 30-year downtrend (lower highs and lower lows) and the rally in yields in 2013 did NOT break this down trend.

Also, yields look to have created a giant “Eiffel Tower” pattern. Keep in mind, most Eiffel Tower patterns return to the level where the base started. If this were to happen again, yields are not at their lows.

Want to learn more about the Eiffel Tower pattern and the “madness of crowds”? (See here.)


The left chart above reflects that the yield on the bell weather 30-year bond is heading lower, breaking from a bearish rising wedge. At the same time the right chart reflects that the yield on the 10-year note is freshly breaking below a rising trend channel after hitting falling resistance earlier this year.

The talking heads on TV keep telling us about the taper and how rates will rise. Tell me about rising rates (See here.)  Year to date, TLT is up 10% more than the S&P 500! The “Power of the Pattern” has been suggesting to members since 12/9/13 that rates should be heading lower.

The bottom line on yields… The 30-year downtrend remains in place and yields on a 30 & 10-year basis are breaking key support lines!

From an Eiffel Tower perspective, the yield on AAA corporate bonds would suggest the low is not in place.


More on interest rates:

Doc Eifrig: What you need to know about interest rates now

Steve Sjuggerud: What you need to know about rising interest rates

Unusual analysis shows interest rates could be approaching a major crossroads

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