The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out) which I published for members and 12631 subscribers this past Sunday.
o reinforce the thesis of a new, multi-year uptrend in rates, despite the bond market rallying (and thus rates falling) for much of 2014 until recently, again consider the TNX – CBOE 10-Year Treasury Yield Index. As you know, bond rates and prices move inversely. So, a bullish setup in the following chart would imply a bearish one for bond prices.
In last weekend’s Strategy Session, we looked at the falling wedge pattern (light blue lines), which developed after the initial inverse head and shoulders bottom (purple lines) dating back to 2011. That bottom remains confirmed. And last week’s impressive spike in rates could easily see them spiking higher yet in the next two weeks up to the upper weekly chart Bollinger Band (yellow arrows).
Some sectors which could easily benefit from the higher rates are…
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The one thing that keeps me from being a complete bear in equities is that the large cap financials like higher rates (to a degree) as they make $$ on the spread.
This would preclude a collapse of the S&P500 as they constitute a large % of same.
Watching BAC,JPM,C, etc. when rates spike confirm this.