Bonds, bonds, BONDS! That’s the story of this market, in my humble opinion. They’ve been on fire lately, and long bond futures are now on the cusp of a potentially massive breakout above resistance in the 166-167 area. See my chart below. If that happens, it would be likely be accompanied by:
 A) A further breakdown in the Dollar Index, which is already on the precipice
B) A big upside break out in gold. Miners are already trading at multi-year INTRADAY highs as I write
C) Some volatility and turmoil in broad stock averages, with financials leading the way lower. It’s worth noting that the XLF remains far below its 2015 highs, and has gone nowhere in the past week even as the S&P has rallied sharply
 We’ll have a bond auction later today, and IF demand is strong, it could be the catalyst for an upside breakout in bond prices. At the same time, you do have to keep a close eye for failed breakouts when key levels are being tested. We’ll just have to see how things shake out.
