The bond market is going wild again on the upside, thereby pressing 10-year T-note yield to 3.94% from Friday's close at 4.01%, while the 2-year T-note is yielding 3.04%. Let's take a look at the TLT's (Lehman 20 year T-bond ETF).

Let's notice that the TLT's have rocketed to a new high for the move at 94.71, which is right at the resistance line of the entire bullish price channel that has been carved out since the June 12 low at 82.20. Granted, there is no reason why the TLT's cannot continue still higher, into the 96.00 target area next. However, typically when the advance hurdles its top channel line, amidst an overbought condition, the price structure stalls and/or reverses. Right now, the flight to safety trade that really began to accelerate off of 91.00 on November 14 also is becoming a very crowded trade as well, which cannot be considered a positive if you are one of the "reluctant" holders/buyers of 20+ year Treasury paper that is yielding about 4.30%. One of these days, if not hours, directly ahead holders of long positions will find a reason, or react to a reason, to quickly bail out of the long side of the TLT's.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.