FVX Longer Term Outlook for Rates
Since Yellen retired in February FVX has risen to test the the junction of the upper parallel at the same point in time as it hit the fixed resistance line at 29.83. Since then it's been consolidating inside a slowly forming pennant formation with a spike down to the 25.46 line almost exactly before it pushed higher again.
Watch this immense gap between the 5 y treasuries and the thirty years bonds. It will close sooner or later and I don´t expect the 5-y to fall or not far enough to close it.
We´ll see probably a fast rise of yields in the 30- y bonds and this will cause much losses to the investors who are not aware of this.
Sure, the indicators are signalling a correction in the...
the course of the 5 years treasuries have rosen from 1.62$ to 2.60$.
Even if the market expectations for higher interest rates are still active we can see a little consolidation on this level - which is the fib retracement 100.
After the consolidation in this flag pattern we can expect a continuation of the rise to prices around 2.90$ (fib extension 1,272%).