Charts Confirm An Interest-Rate Bottom
Last Friday, interest rates hit 2.30% on the 10-year bond. While counter intuitive, this looks like a long-term bottom prior to a move back to 3%. The charts always tell us the truth, so let's take a look. First, note the large sell on Friday with huge volume. This can be seen clearly on the ProShares UltraShort 20+ Year Treasury (ARCA:TBT). The volume was the biggest since interest rates last bottomed in early-mid 2013. That's called 'capitulation', and is clear signal of a bottom. In addition, the following day (Monday) interest rates did a complete reversal of their down move. That's known as a 'reversal candle' and is a major sign that we're near a bottom.
These signals are clearly telling us that rates will begin to move higher and could see 3% by year's end.
ProShares UltraShort 20+ Year Treasury
Here's the CBOE 10-year, currently 2.405 up 0.0180:
