With respect to technical analysis of markets, break outs above or below long standing (or even short term) trend lines are not to be trusted until a successful re-test of said trend line occurs, however, at present, the long bond chart has, at least by my runes, signaled a major trend change by breaking out above the upper trend line of a decades long bull market in bonds.
If one is inclined to follow the utterances of certain monetary authorities and their mainstream media minions, the action in long rates of late is the result of an expected incipient rebound in the economy. If, on the other hand, one subscribes to the well buttressed argument of persons like former Reagan budget honcho David Stockman, the implications of the recent action in the long bond are decidedly less than pleasant to put it mildly. Long (bond) story short, the ability of the U.S. government to fund its epic profligacy is going to come under considerable constraint in the not too distant future. I hasten to add that the ominous rise in rates is also a function of the market sussing out that the debt ceiling is going to be raised, yet again. In any event, the action in bonds spells trouble of the not to be deferred for much longer sort.
As the time I have to devote to this humble blog is limited presently, a further discussion of this development will have to wait until next week.