I have been highlighting higher Treasury yields since October
15 (well before the heard), and I also mentioned on December
8 that the move higher in Treasury yields would "pick up steam". But
every price move has its limits, and the Ultra Short Lehman 20+ Year Treasury
(symbol: TBT) is no different.
Figure 1 is a daily chart of the TBT. Prices are at the upper end of a well
defined trend channel, and they are hitting key pivot point resistance levels
at 40.79. I would expect some consolidation at this area before prices move
higher.
Figure 1. TBT/ daily
Why do I think yields continue higher? This can be seen in figure 2 another
daily chart of the TBT. The inverted head and shoulders bottom is nicely seen,
and the resolution of this pattern should result in a price move of approximately
7 TBT points above the neckline of the price pattern.
Figure 2. TBT/ daily
The measured move of 7 points plus the neckline value of 37 suggests that
TBT should get to 44. This is consistent with weekly resistance levels, which
are shown in figure 3.
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