Long Bonds

End-of-the-year, holiday trading sessions tends to be thin. As a result, any interpretations made from price and volume are often inconsistent at best. With that said, it is important to note that the price and volume action in the double inverse long bond ETF (TBT) suggests a breakout of the short-term head and shoulders bottom. The 12/11/09 swing high was exceeded on increasing in volume despite holiday conditions. This bullish setup warrants close scrutiny as it implies the following: (1) Higher yields, and (2) a retest of the larger, more significant head and shoulders formation and 1982 trendline over the short- to intermediate-term.

The 30-yr yield and Long-Term Government Bond Total Return Index charts illustrate why the bond market has become the canary in the coal mine. The bear's growl is intensifying.

Stay tuned.

TBT:

30-YR Yields:

LTGBTRI: