Let's have a look at the bond market from the perspective of 10-year yield, which apart from signs that "the world is falling apart economically," nonetheless, is warning me that longer-term interest rates in the U.S. are vulnerable to a surprise on the upside.

My near- and intermediate-term work on 10-year yield continues to warn me that despite deteriorating economic fundamentals, longer-term yield is at or very near the completion of a significant correction and upside continuation of its Oct 2010 to Feb 2011 bull phase.

That said, yield needs to claw its way above 3.06% to trigger upside traction, critical for holders of the ProShares UltraShort 20+ Year Treasury (TBT).

 

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