10Y UST 'TNX' PUSHES TOWARDS MATASII TARGET ON FOMC MEETING ANNOUNCEMENT
Since the 10Y UST (TNX) completed the MATASII Diamond Patterns (originally drawn in December 2017), we have been consistently calling for a retracement to the 2.65% level.
The December FOMC meeting further pushed the TNX yield towards are stated target.
We expect the "gap" (shown below) to be filled before yields advance towards the completion of a Head & Shoulders formation with the finalization of a "Right Shoulder". Mounting US Fiscal Deficits from unfunded tax cuts and unfunded entitlement programs, political pressures for "Helicopter Money" (ie Student Loan forgiveness to solve a collapsing housing market) and wage inflation pressures (among a raft of other fiscal & monetary policy mistakes) in the midst of a global credit contraction will underpin the Right Shoulder.
NOTE: When we first published the above TNX pattern in December 2016, our debate was not the final interest rate (i.e. 3.15-3.30% - which turned out to be 3.24%) but rather whether we would see a Head & Shoulders pattern or "M" Top culmination? There is still a chance we have already completed a slightly distorted "M" top? A decisive break through 2.65% will confirm the "M" Top scenario.