My near and intermediate-term technical work on the 10-year yield is warning me that the correction in yield off of the February 9 high at 3.74% is nearing completion ahead of the initiation of a new, powerful upleg.

Let's notice that all of the action during the past two weeks has carved out a "falling wedge" formation within the lower portion of the larger, corrective pattern that has dominated the price action since early February.

The falling wedge formation usually represents a consolidation prior to one final price plunge that concludes the corrective period (in this case, from the February 9 high).

Right now, I am expecting one more bout of weakness that presses yield to 3.03% before its reverses to the upside in a big way. It is with the foregoing in mind that we are bullish the ProShares UltraShort 20+ Year Treasury ETF (TBT).

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.