The inverse head and shoulders/double bottom massive pattern in TLT that was mentioned in a post two weeks ago failed spectacularly with the last blow delivered on Friday when 10-Year Note yields rose 5.4%, 14 basis points in one day. This failure must be added to a long streak of chart pattern failures of the last few years that have caused significant losses to those relying on noise trading methods.

After a short break above the trendline that confirmed the pattern according to classical chart analysis, TLT prices plunged literally below the right shoulder and towards support at the double head of the massive complex inverse head and shoulders/double bottom formation.

This marks another spectacular failure of chart trading. Seems like the conclusions in the paper “Noise Trading and Illusory Correlations in U.S. Equity Markets“, by Jennifer Bender et al. is correct and only those with a cognitive bias trade these formations.