10-Year Treasury yields are headed for a test of resistance at 1.70 percent after recovery above the descending trendline warned of a “bear trap” — actually a bull trap because yields are the inverse of price. Follow-through above 1.60 percent has confirmed, and breakout above 1.70 would signal an advance to 2.0 percent* — a bullish sign for stocks.
* Target calculation: 1.70 + ( 1.70 – 1.40 ) = 2.00
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.