Below looks at the patterns on the S&P 500 and the yield on the 10-year note -- Inverted to look like bond prices -- since the late 1980s. A rare test of support and resistance by stocks and bonds is now in play.
The S&P 500 has remained inside of rising channel (1) for much of the past 20 years.
And the 10-year yield (Inverted) has remained inside of rising channel (2) for the majority of the past 20 years.
S&P is faced with a chance to breakout of its 20-year channel and yields have a chance to break down out of a 20-year rising channel at (3).
Rarely have stocks been hitting resistance and inverted yields been at support at the same time. One occurrence came back in 2007. What happens at (3) is NOT your average test of support and resistance, friends.
All of this is taking place as sentiment is also reflecting some rare numbers. According to Sentimentrader.com, the bullish sentiment on the 30-year yield is near “0% bulls” and the dumb money stock confidence level now stands near the “80% bullish level.”