BILL GROSS: There's a level way more important than Dow 20,000

The Dow Jones Industrial Average has flirted with the 20,000 level for much of the past month.

It got within four-tenths of a point on January 6 but was unable to finally take out the level.

And while nearly everyone on Wall Street is on the lookout for the first Dow 20,000 print, Bill Gross says there's a much more important level to worry about.

Gross, who was once referred to as the "Bond King," says that the 2.60% level on the 10-year yield is what everyone should be watching as a breakout above that level would mark the end of the 30-year bull market in bonds.

Here's Gross in his January outlook that was published on Tuesday (emphasis added):

2.55% to 2.60% is the current "top" of this trend line, and over the past few weeks it has held and reversed lower by 15 basis points or so. BUT----------. And this is my only forecast for the 10-year in 2017. If 2.60% is broken on the upside - if yields move higher than 2.60% - a secular bear bond market has begun. Watch the 2.6% level. Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017.

That falls roughly in-line with the thinking of Matthew Hornbach, head of global interest rate strategy at Morgan Stanley. Back in the middle of December, Hornbach called the 2.50% level on the 10-year "important."

While both levels were breached when the Fed raised rates at its December meeting, buying over the past few weeks has pushed the benchmark yield back down to 2.38% on Tuesday. Hornbach says the failure near 2.50% suggests the 10-year is likely to test the 2.00% to 2.20% area.