It looks like bonds is showing its true color here. As you can see there is a bearish flag forming on bonds. Once the 147 level is broken, there is real trouble coming, and that will of course cause a rally in the S&P 500 and we should see some sort of rally, as we have been saying.
Bears are probably not going to like what they see in the next few weeks. The reason is the the momentum was up in DECEMBER, and we saw a holiday reversal to the downside. We are now starting to come back into the time period where holiday re-reversals start to occur, which means back to the original trend, which is UP!
A nice bear flag on bonds here at the moment, and we are getting plenty of warning the S&P 500 bulls are not too far away.
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