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On July the 17th, the first chart below was published, reflecting a pattern that has seen rates rise each time, over the past 20 years (see the earlier post here).

 

 

The following two charts reflect other pattern evidence that bond prices could be at or close to a peak. The 30-year bond looks to have made a triple top and is breaking support (1st below), and the 5-year yield created a monster "engulfing bearish pattern" this week (2nd below). These are patterns that often appear at market highs.

 

 

 

 

Ironically enough, all of this is taking place at the same time Wall Street strategists are suggesting the highest exposure to bonds in the last 15-years!

 

 

From a portfolio construction/risk management perspective, these charts and strategist optimism toward bonds suggest that caution is indeed the watchword when it comes to interest rates and owning Government bonds.

 

(c) Kimble Charting Solutions
blog.kimblechartingsolutions.com