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10-Year Yield Hits 52-Week High… Wedge Pattern Signals Big Move Coming… Which Way Will It Break?… 140% Fast Winner from Jonathan Rose… Tom Young and Eric Fry Urge Investors to Avoid Hot AI Trades
This morning, the 10-year Treasury yield hit a 52-week high – 4.6%.
This alone has important consequences for your investment portfolio, but there is another angle that can be even more impactful.
First, to make sure we’re all on the same page, the 10-year Treasury yield is the most important number in the global economy. It sets the pace of borrowing costs – mortgage, business loans, and credit markets. It determines the discount rate that investors use to evaluate future earnings, meaning that higher yields put pressure on stock valuations. They compete directly with stocks: when “risk-free” returns rise, money moves out of stocks.
Basically, when the ten years move, everything feels that way.
This 52-week high comes as rising inflationary pressures linked to the Iran war are boosting expectations for a Fed rate hike later this year.
But in the chart below, you’ll see a setup that may be more difficult for millions of wallets.
What you’re looking at is the 10-year Treasury yield dating back to mid-2021. The trend lines reveal a typical symmetrical triangle — a compression pattern in which higher lows and higher lows converge toward a decision point. History suggests that when these trend lines meet, a major movement follows.
The question is “in what direction?”
A big breakout from here would open the door to a move to at least 18-year highs in yields of just over 5% – and possibly higher if market confidence is truly shaken.
On the other hand, a break below the lower rising trend line – around 4.0% – would signal a return towards much lower yields, and with it the interest rate cutting environment that much of the market expected at the beginning of this year.
Right now, the bond market is indicating an upward breakout.
What is it like for each step?
Proponents of a yield breakout point to the Federal Reserve’s dual mandate: keeping inflation under control while simultaneously supporting employment.
They say inflationary pressures linked to energy and the Iranian conflict are now accelerating faster than labor market weakness. In other words, rising inflation strengthens the case for raising interest rates – or at least keeping interest rates high – while employment conditions are still not weak enough to justify cuts.
That’s why some economists now believe the Fed may find itself cornered. Even if growth slows, persistent inflation may prevent policymakers from easing monetary policy anytime soon.
Here’s Mark Zandi, chief economist at Moody’s Analytics, making the case last week:
I don’t see how (new Fed Chairman Kevin Warsh) is going to get any kind of support for lowering interest rates in the current environment.
If inflation expectations continue to rise – and they are drifting higher – it will be difficult.
Not only would lowering interest rates be unlikely, but even keeping interest rates where they are would be extremely difficult.
On the “break-down” side, let’s turn to Treasury Secretary Scott Besent. talking to CNBC He said last week:
I firmly believe that there is nothing more transient than a supply shock, and we can look at that, because before the Iranian conflict started, core inflation was declining.
Therefore, I think core inflation will continue to decline.
In strengthening his case, he added:
I was never on the team temporarily during Covid.
We’ll get to the other side of this, I don’t know if it’ll be a few days or a few weeks, and energy inflation will come back down.
Mentioning the word “temporary” directs us towards the crux of the issue
Will Iran-linked inflation remain a temporary supply shock – or will it turn more structural?
Zandi seems to be leaning towards the embedded part. Besant continues to claim that it is transitional, carefully distinguishing between energy shock-induced inflation – which has a natural ceiling – and demand-driven diversification, which has proven so stubborn post-Covid.
As we covered recently Summarieslegendary investor Louis Navellier was making the same argument as Bessant. His read: The market is misreading the temporary shock as a structural problem, and has been positioning its subscribers accordingly — ahead of what it believes will be an eventual cycle of interest rate cuts.
The important person in all of this is the new Fed Chairman, Kevin Warsh. While Warsh has held hawkish views on monetary policy in the past, he has also called for “regime change” at the central bank, writing last fall in an article: Wall Street Journal An editorial argues that AI represents a “major force for dampening inflation.”
What Warsh shows at his first FOMC meeting on June 16-17 has great significance for how this wedge is resolved.
Lewis has already made his call: temporary victories, the wedge crashes lower, and interest rate cuts are coming. For the specific companies he places before this outcome – and the historical rules of the game from which he derives – Check his replay 10X Fed shock Happened from last week here.
By switching gears, Jonathan Rose gave his viewers the chance to make a 140% profit in two days – here’s how…
As the market grapples with inflation data and uncertainty from the Federal Reserve, veteran trader Jonathan Rose, editor Masters in Trading Livedoes what it does best: finding high-conviction short-term trades and putting subscribers in a position to profit regardless of the market direction.
In the end Monday is free Masters in Trading Live episodeJonathan highlighted the opportunities in Chinese stocks. His reasoning was clear:
Chinese stocks will rise as Trump heads to China. Trump will come out of China with some kind of good news because that’s how these things work…
He’s not going to go there and come back and say, “I have bad news. Let’s destroy the market.” No, he wants to support the market.
Recommended purchase JD.com Company (Jordanian dinar) June 18 calls are $32, paying up to $1.25 per contract.
By Wednesday, JD’s price had risen more than 8%, taking Jonathan’s recommended option to around $3.00.
Anyone can watch for free Masters in Trading Live This incident and the trigger pulled turned every $125 risked into roughly $280 in two sessions – a better than 140% return on the premium.
And the trade is not over.
The calls still have approximately 30 days until expiration. Jonathan says this gives traders a variety of ways to trade: holding a trade longer, taking partial profits, or increasing profits to lock in gains and stay in the game.
This is the kind of setup that Jonathan regularly provides in his free episodes. To be present when the next segment is pointed out to his viewers, Click here to join him Masters in Trading Live.
Now, Jonathan’s primary trading advantage is not to chase what’s hot. They track institutional footprints before the public arrives – and often sell to the retail audience when they arrive late.
This is even more important today because, as Tom Young explains below, once speculative trades become too crowded – especially in AI – risks can rise quickly.
The AI business that everyone loves is starting to look dangerous
Tom, lead analyst for our global expert Eric Fry Fry investment report, I published an article last week that every investor riding the AI wave should read carefully.
The book begins with a story about a Canadian hydrologist – someone with a Ph.D. in Arctic Environmental Science and has never traded anything in his life. He recently built an AI-powered trading platform in six days using Anthropic’s Claude Code.
The platform scrapes news, Reddit and Twitter feeds, and trades that information across three financial exchanges. It is said to have worked well.
Now, while Tom praises the initiative and the success, his overall opinion is not so positive:
I’m upset because I know how these algorithms work.
I’ve built several myself, and the success of Ithorson’s specific approach means we are entering a manic phase in stock markets where hype and interest are more important than fundamentals.
Tom cites numbers to back this up.
Semiconductor stocksas measured iShares Semiconductor ETF (Sox)rose as much as 70% in just six weeks. shares Intel Corporation (Intech) It now trades at roughly 100 times forward earnings — higher than during the dot-com heyday. And the chip maker is one that lost $54 million traded last year at 60 times forward earnings.
Even if you’re in the AI business and aren’t yet ready to sell, Tom’s take here is something you should grapple with:
We are seeing valuations where stocks could lose 50% or more on sentiment alone.
To be clear, Tom and Eric are not advising investors to avoid AI altogether – their advice is to avoid crowded, momentum-driven trading and focus instead on what Eric calls “AI survivors.”
These are companies that produce goods and services that AI cannot replicate or replace, in industries such as agriculture, energy, mining and hospitality.
To get Eric’s full thinking about where to position himself – and what to avoid – Check out his “Sell This, Buy That” research reports., It distributes a small number of specific shares for buying and selling.
As for Tom, I’ll let him take us out today:
We all know that 1999 and 2021 ended badly for speculators. Momentum alone cannot justify sky-high prices, and “ridiculous” prices are coming back down with a vengeance…
When the reckoning comes – and it will come – the results will erase years of performance…
It is essential to stay away from stocks with significant downside.
I wish you a good evening,
Jeff Remsburg
