Is The Latest Surge In Interest Rates For Real?

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October 6, 2018 6:50am NASDAQ:TLT

From Dana Lyons: Bond yields have broken out to multi-year highs, but is this move sustainable?


The ruckus in the equity market the past few days may have caused a more significant markets development to fly under the radar. It comes from the bond market where we see the 10-year (TNX) and 30-year (TYX) U.S. treasury yields breaking out to multi-year highs.

Here’s the TYX breaking above the well-defined peaks of the past few years near the 3.25% level.

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And here’s the TNX hitting its highest levels since 2011. Especially noteworthy as the chart shows, however, is the fact that the yield is approaching the epic Down trendline from its secular peak in 1981.

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Now, obviously with a trendline that’s been heading lower for more than 3 and a half decades, it is going to take a colossal effort to reverse the downtrend in long-term interest rates. So is the current ramp up the start of that reversal? Or is it just another blip in the still-intact trend lower? In a Premium Post at The Lyons Share, we share our strong view on the matter, including the key levels to monitor in assessing the likely direction of the 10-year and 30-year yields.

If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

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Disclaimer: JLFMI’s actual investment decisions are based on our proprietary models. The conclusions based on the study in this letter may or may not be consistent with JLFMI’s actual investment posture at any given time. Additionally, the commentary provided here is for informational purposes only and should not be taken as a recommendation to invest in any specific securities or according to any specific methodologies. Proper due diligence should be performed before investing in any investment vehicle. There is a risk of loss involved in all investments.


The iShares Barclays 20+ Yr Treas.Bond ETF (TLT) closed at $113.04 on Friday, down $-0.98 (-0.86%). Year-to-date, TLT has declined -10.14%, versus a 8.29% rise in the benchmark S&P 500 index during the same period.

TLT currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #16 of 28 ETFs in the Government Bonds ETFs category.


This article is brought to you courtesy of Dana Lyons, JLFMI and My401kPro.


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