Michael Oliver and Ron Paul Help Us Envision a Possible End Game

Oliver stated that if the U.S. T-Bond managed to rise above the parallel channels shown on the chart above, it would suggest that the T-Bond is setting up for an exhaustive upside blow-off top. Specifically, Michael’s momentum work identified a T-Bond price of 170 that if exceeded by the end of June would signal odds for an exhaustive upside blow-off top that would end the 35-year bull market in U.S. Treasuries.

Well the verdict is in. The chart above right shows that the T-Bond finished the month of June at $173.22, or $173.6875 if you don’t like to deal in 32^nds. I hope to ask Michael about this matter on my radio show next Tuesday, but clearly, based on his June 22^nd missive, the table is set now, not for a whimper-like end of the greatest bubble bull market in history—the bull market for long-dated U.S. Treasuries, but for a possible violent reversal, sending interest rates rising very, very dramatically. To quote Michael, “If it (T-Bond market) opts to blow off to the upside first, then it’s likely the subsequent failure down through this up-trending structure will be even more savage than if it simply withered and dropped through the uptrend without having entered into a blow-off phase before the downturn.”