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Yesterday the Power of the Pattern suggested bond prices could get slammed due to a bearish "Head & Shoulders topping" pattern that looked to be at hand (see post here).

Today bond prices have fallen enough and rates have risen enough to test both necklines of these very important Head & Shoulders patterns.

 

 

If bond prices break below their neckline, they could get hit VERY HARD and yields rally quite a bit! The ideal position is on a neckline break.

This is a follow-up to the "Treasuries at a Turning Point" post, which pointed out that very few people were bearish bonds at a price point that suggested rates were ready to rise. This all took place 6 weeks BEFORE today's Fed meeting.

 

 

The necklines are support until broken!

 

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