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