Another lucky call on [$TNX.X]

In the backlink I modeled a pullback to between 21.50 and 22.50 as indicated by the model below.



Current snapshot below shows that, so far, the low was 21.86, reasonably within the modeled range.  The fat lady has not sung yet on this one but a higher high than 24.90, especially if it happens "with gusto" will be good evidence that my long standing bullish model for rates on the ten year US treasury is playing out.

Alternatively, a move below 22.50 would suggest that a falling wedge will eventually be the outcome with a likely bottom in the $21 range.

The real take-away here is this:  If rates suddenly jump then it will have happened without the blessing of the federal reserve and the smart market operators will realize that the fed is losing control of the bond market.  Since many loans, including margin debt, are based off the 10 year, it will make margin debt more expensive in what has been a declining market since mid May.  Nobody wants to pay interest for the privilege of losing money!  The smart players will bail out of their record margin position leaving the small guy to face the collapse, just like has happened in China.  The small players margined into the final stages of the rally while the pros were modeling the herd's movements (a-la con man Keyne's "animal spirits")  exactly the same as I showed is possible here (except for me it is a hobby and for them it is a job), and then they let the trap door open up under the feet of the patsies.

Time will tell but if this was going to stall here it would likely have done so at the gap fill and not powered past it.