NEW YORK (TheStreet) -- After bottoming in January of this year near 2.23%, long-term bond yields have risen to 3.11%, a near-40% rise in less than five months. Our decision support engine (DSE) is warning of a short term peak, with a few weeks of corrective behavior. That means yields should come down, while prices rise slightly.
Our DSE is a composite system of multiple technical indicators that is designed to signal when trends are maturing and are at risk of at least short term direction changes. The signal being generated now warns that for the next three-to-eight weeks, these yields should experience a pullback to between 2.52% and 2.72%. For those that play price, rather than yield, that translates to a bounce from the current level around 117.70 toward the zone between 126 and 132.