Top Advisors Corner

Tom McClellan: Upturn Ahead for T-Bond Yields

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I like getting answers ahead of time, and I really like chart pattern leading indications, like the one in this week’s chart, that can give us useful answers about what lies ahead. The movements in crude oil prices tend to show up again about 3 weeks later, in the movements of bond yields, with the dance steps getting repeated.

Sometimes the Treasury Yield Index (TYX) does its own artistic interpretation of those dance steps. And sometimes it goes completely off script for a while, but then works extra hard to get back on track with what crude oil says should have been happening. It is not a perfect leading indication - it is merely very good.

Crude oil prices bottomed back on June 12, so that should have meant a bottom for the TYX ideally on July 5.  It actually bottomed one trading day early, on July 3. That's close enough to the target for a rifle shot fired 3 weeks before.

The rally in crude oil prices since June 12 should now see its echo in rising bond yields over the next 3 weeks, especially over about the next week and a half.

Tom McClellan,
Editor
The McClellan Market Report
www.mcoscillator.com

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