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Stocks and Bond Yields Testing Multi-Decade Resistance!

Courtesy of Chris Kimble.

At what point does the rise in treasury yields (and interest rates) matter to the economy and stock market? Today’s chart looks at the past 4 decades of the 2-year treasury note yield versus the stock market (the Dow Jones Industrial Average).

As you can see in the chart below, the 2 year treasury yield has been in a downtrend for quite some time (1). A steep rally in 2-year rates has yields testing this down trend line right now. The past 2 times the downtrend line was tested were in 2000 and 2007 – both resulted in bear markets!

It’s also notable that the Dow Jones Industrial Average is testing upside resistance within its long-term uptrend channel (2)… it did this in 2000 and 2007 as well. You don’t see stocks and yields testing mult-decade lines at the same time very often!

2 Year Treasury Bond Yield vs Dow Jones Industrials Chart

CLICK ON CHART TO ENLARGE

This article was first written for See It Markets.com. To see original post CLICK HERE

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