Above looks at 2- and 5-year yields over the past 30 years. The rally of the past couple of years has both of them testing 25-year falling resistance line (A) at each (1). While testing this long-term resistance, the insets indicates that potential reversal patterns might be taking place this week.
While 25-year resistance is being tested, momentum is at levels seldom seen in the past quarter century. In fact, rates were closer to highs than lows when momentum was this high in the past.
Below looks at the polar extreme in the rate world, Zero Coupon Bond ETF (NYSE:ZROZ).
ZROZ tested dual support and the apex of a bullish falling wedge of late at (1), as momentum was low and possibly creating higher lows. Currently, ZROZ is working on a breakout at (2), which would suggest at least a short-term high in yields/lows in bonds could be at hand.
Full Disclosure- Members bought ZROZ a couple of weeks ago at it appeared to be attempting a bullish falling wedge breakout.