Image Source: Pexels
 

Following Powell’s surrender on Friday, a glance through the charts seems to strongly support the prospect that rates across the board are going to drop substantially. I do not pretend to be an interest rate expert, but it seems to me shorter-term rates will be more prone to weakening than, let’s say, the thirty year. Almost all the charts below have a similar setup: a sharp rise in rates, a rounded top, and what appears to be the beginning of a drop. Here we have the 10-year rates:
 

The mortgage rate on 30-year fixed loans:
 

Mortgage rate for 15-year loans (take note how, historically, these tinted zones have been followed by substantial drops):
 

The 6-month T-bill rate, which seems already well on its way
 

The 2-year Treasury:
 

The 1-Year constant maturity:
 

And the 5-Year Treasury:
 

The one freak amidst all of these is the 30 Year Treasury, whose rate HAD been in a topping pattern but in recent months has garnered strength and busted well above it. This is a good illustration as to how tops that are in formation aren’t really legitimated until the price level has dropped below the base of the pattern.
 

In general, it seems that rates are heading down (and, thus, funds like IEF are heading higher).

More By This Author:

Index Update
How About Now, Dow?
Quantum Falling Apart