The yield of the 10-Year Treasury note climbed from 4.73% in March to 5.32% in June, at which point it had surged to a six-year resistance line, implying the potential for much higher rates. It then reversed in a big way and plunged to 4.74% into today's low, mostly in response to flight-to-safety concerns.

Apart from what might drive the yield still lower, a look at the big picture technical situation shows that the declining yield structure is nearing a confrontation with a 4-year support area (4.75% to 4.62%) that might be just as difficult to break and sustain as was the failed upside yield breakout in June -- above a 6-year resistance line!

Where does that leave us? Betwixt and between what are eventually converging major trendlines. Whichever side is violated and sustained (5.32% and 4.62%) will determine the intermediate-term directional move in long-term rates.

What is my suspicion? Yield will break the lower major support area (4.75% to 4.62%) for a plunge towards a retest of the 2003 lows near 3%.

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