Long-term interest rates, i.e., yields on the 30-year Treasury Bond, have been at distress levels since they began their big downturn in April. That decline continued virtually uninterrupted right through the end of August. Yet, since hitting those August lows, long-term interest rates have spiked nearly 12%. The chart below shows that yields now are close to breaching their short-term, 50-day moving average.

So, what’s the deal with yields? Well, I think the biggest factor is that long-term Treasury bonds have just become too overbought of late, and that means a slight correction in bond prices (i.e., a rise in bond yields) is well overdue.

Now, I don’t think the recent spike in yields quite signals the bursting of the bond bubble just yet. I do, however, think that the spike in yields is something bond owners need to be acutely aware of. You don’t want to get caught on the back end of a mass exodus from bonds and, as such, I think all long-term Treasury bond holders (as well as holders of bond funds) need to keep careful watch on all of their bond positions.