A Resounding Reminder of Market's Thirst For Data Over Technicals

Technical analysis provides an easy entry point for folks who want to talk about what the markets might do next.  It is made all the more alluring due to its implicit claim to be better than a coin flip at predicting the future. Unfortunately, that is a bit of a trap.  We've been careful to note--especially in this market--that no matter what the technicals say, data will speak louder. 

Incidentally, the technicals have been saying good things about bonds.  The following chart of 10yr yield candlesticks has 3 fairly popular overlays: Bollinger Bands, stochastics, and MACD forest (really just a more digestible representation of stochastics).  If you look up the textbook definition on the "signals" associated with these technical studies, each has provided a fairly classic positive signal. 

As we warned earlier this week, a sideways consolidation after a sharp sell-off is always going to throw up false positives in the technicals, and that the market is much more interested in DATA!  As of this morning, we have a stark reminder about that.