It's a crappy day.

Sorry to use such an esoteric analytical term, but it's the most accurate way to describe the outlook.  So what changed?

Long story short, we'd been in a narrow, consolidative range since late September.  That range had a chance to be a straight up correction back toward lower rates, but bonds weren't able to maintain momentum after last Friday's strong post-CPI rally.  Resistance kicked in at a well-traveled technical level of 2.28%, thus setting up the lower boundary of the consolidative range.

Until yesterday, we HAD a series of "lower highs" in rates to offset the series of "higher lows."  In short, yields were converging, and it was anyone's game.  

This morning, the upper consolidation line (both in teal in the following chart) is definitively broken after overnight news of the Senate passing a budget resolution paving the way for a tax reform vote.

The implication is a test of 2.37%, an important technical level that's sadly already being broken as I type this, and then a more important test at 2.40 (with some room for overrun at 2.42%).  Hitting 2.40% seemed like a long-shot yesterday, but as today begins, it seems just as unlikely that we'll avoid hitting it.  Whether we do or we don't, momentum has shifted negatively, AGAIN.  The default strategy is defensive until further notice.