RBC: “Something Is Wrong Here: Indicators Are Flashing An Imminent Yield Breakdown Warning”

Friday, May 26, 2017
By Paul Martin

by Tyler Durden
ZeroHedge.com
May 26, 2017

While stocks continue rising to all time highs on the back of a handful of tech stocks, the tension below the bond market grow, only not in the direction that an all time high in the S&P would suggest. As RBC macro strategist Mark Orsley writes in a Friday note, “I am finding it increasingly difficult to see a near term catalyst for UST’s to sell off. In fact, almost all indicators I watch are flashing a warning that a breakdown in yields (longer end) is increasingly probable” and urges readers to “position/protect for a move to 2.00%.”

Orsley lays out 4 reasons why any new bond shorts may soon be forced to cover, again.

1. Technicals -> two head and shoulder formations point to lower yields. Target of 2.05% on the Feb/March formation, and if 2.17% gives way, the H&S from April/May targets 1.95%. Notice the MACD starting to trend lower…

The Rest…HERE

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