The principal driver behind soaring equity prices the past six weeks has been the counter-trend rally in bonds. This week, it looks like bonds may have peaked under a key resistance level. Specifically, there was a price gap on the TLT at 96.66 which was approached but not pierced, and TLT starting to weaken afterwards (in spite of equities still soaring).

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We can see this exhaustion reflected in other interest-sensitive financial instruments as well. Below is the municipal bonds. In this instance, there was also an important price gap at 107.58 which as approached, this time on Thursday, but not pierced.

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Finally, corporate bonds look to be done with their mega-bounce, as the long-term descending trendine suggests. This has been engaging in a series of lower highs over the course of the year.

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Monday will probably be a non-event across the board for these, as well as equities, because the one-two punch is coming in terms of the CPI (Tuesday pre-open) and the FOMC (Wednesday during market hours).

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