Sunday, July 7, 2013

TNX Weekly Chart Multi-Year Upper Trend Line Inverted H&S

The green lines identify the ongoing downward-sloping channels for the last few years. Note the upper green trend line which would target a test of yield at 2.8%-2.9%. The red line underneath uses additional yield touches in 2010 and 2011 to create another upper trend line that was violated at 2.50%. The 20 MA has curled above the 50 MA which is a bullish sign for yields (bearish for note and bond prices). The indicators are long and strong reflecting the very strong momo over the last couple months. Stochastics and RSI are overbot. Yield will likely stay at these elevated levels for several weeks forward.

The inverted H&S iwth head at 1.4% and neck line at 2.4% targets 3.4% but let's simply identify the 3.2%-3.7% resistance zone as the target area now in play for this pattern. Yields do not have to get to 3.2%+ overnight. Keystone continues to anticipate more sideways behavior than anything moving forward. Projection is that the upper green trend line will hold yields in check at 2.8%-2.9% with a multi-month move ahead through 2.2%-2.8%. The big up in yields is likely occurring too far too fast. The pink line at 2.85%-ish offers up strong horizontal resistance from the last five years. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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