Monday, October 28, 2013

TNX 10-Year Treasury Note Yield Daily Chart Downward-Sloping Channel H&S Gap

The 10-year yield continues to drift lower (bond prices higher) through the downward-sloping channel. The top call in yields in late August early September occurred as expected due to the rising wedge, overbot conditions and negative divergence. The yield is tapping on the lower rail of the channel now and the histogram, stochastics and ROC are positively diverged wanting to see a bounce in yields for a couple-few days. The RSI and MACD line remain weak and bleak, and the RSI is not yet oversold, so lower lows in yield are anticipated moving forward. The weekly chart reinforces this downward path. There is a juicy gap at 2.30%-2.40% that serves as a downside target. The neon blue lines show an H&S pattern in play. There are a few options for the head and shoulders but in general, the head is at 3.00% and neckline at 2.55%-2.60%, targeting the 2.10%-2.20% level if the 2.30%-2.40% level is violated to the downside.

The current print on yield is 2.52%. Projection is for a bounce to occur to the 2.55%-2.65% level which would be in concert with testing the 20-day MA resistance and the top rail of the channel as it descends. Then yield should leak lower again to allow time for the RSI to set up with positive divergence for another bounce from the 2.40% area. In general, lower lows for yield are anticipated moving forward for the weeks ahead with the 2.10%-2.20% target achievable by the end of the year. Lots of sideways is likely in store for the currencies, euro, dollar and Treasuries for the months and perhaps years ahead. 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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