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Image courtesy of Stockcharts.Com, inset by Centerpoint Securities, annotations by Mish.

Centerpoint explains “An ascending triangle chart pattern is a bullish technical pattern that typically signals the continuation of an uptrend. They can signal a coming bullish breakout above an area of resistance after it has been tested several times.”

Many people do not believe in technical patterns, others believe in nothing else. Certainly, technical patterns fail often enough.

My take is they work best as entry and exit point strategies, especially when fundamentals align.

30-Year US Treasury Ascending Triangle

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The technical picture could not be more clear.

Fundamentally Speaking

• The Fed has hiked rates from a range of 0.00-0.25 percent all the way to 5.25-5.50 percent but there has not been a recession or a significant rise in the unemployment rate.
• On April 1, I noted Manufacturing ISM Inches Positive After 16 Months of Contraction. In response, treasury yields rose.
• On March 31, I noted Spending, Income, and Inflation Data Do Not Support Fed Interest Rate Cuts

I still believe the economy is much weaker than it looks, especially in the Household Survey.

We have an update on Friday. But ADP was on the hot side today, reporting 184,000 private jobs vs a Bloomberg consensus expectation of 150,000.

Real GDP for the Fourth Quarter Revised Up, GDI Jumps

The BEA revised fourth-quarter GDP from +3.2 Percent to +3.4 percent. Real GDI was a whopping +4.8 percent but discrepancies remain and charts tell a better story.

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GDP and GDI data for the fourth quarter from the BEA, chart by Mish

On March 28, I reported Real GDP for the Fourth Quarter Revised Up, GDI Jumps

GDP was stronger than expected in the 4th quarter of 2023.

Many economists and analysts believe GDI is a better measure (they should equal), and the discrepancy is huge. So which one is correct?

In the next 5 years employment in age groups 60+ will drop by ~12.5 million

Due to age demographics, I expect employment in age groups 60 and over to decline by about 12.5 million. Let’s go over the math to see how I arrived at that number.

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Population stats are from the BLS. Expected Employment Loss is a Mish calculation based on the Employment Population Ratio (the percentage of people working in each age group).

On March 21, I reported In the next 5 years employment in age groups 60+ will drop by ~12.5 million

Demographic data strongly suggests there will not be a big surge in unemployment even when recession hits.

On the inflation side, even if one foresees recession, literally everything Biden does is inflationary.

Student loan forgiveness, Biden’s push for union contracts, energy policy, regulations, tariff policies, and the ridiculously named Inflation Reduction Act are all inflationary.

So even if recession hits, many items suggest a stagflationary recession, not a deflationary one.

The technicals and fundamentals align. That does not guarantee the outcome, but they provide an ongoing big warning to treasury bulls.

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