Crunch time for the [$TNX.X] model

At the backlink I showed this high level chart as my top level model. It basically said that the early May peak was 1 of 3 and that we should get an a-b-c back to the level of the prior 4th.






















That post also provided a model indicating that the pullback into wave 2 of 3 was likely complete.  Since then, that 2nd wave has extended and is now an even better fit to the typical EW expectation of a retracement to the level of the prior 4th before moving up into the next wave.  It looks to be bottoming right into the end of May. 

If this count is correct then the next wave up should be a 3rd of 3rd which would imply a rapid move up in interest rates per unit time.  If this were to happen I have to believe that it would rattle leveraged longs in the stock market who are getting access to trading leverage at historically low rates.  When their borrowing costs begin to move up they will find the prospect of holding their leveraged positions is no longer a good deal for them and so they will bail, perhaps in unison as is the way of the herd.

Keep a close eye on interest rates because I think they are very important as to the future direction of the stock markets.