Tuesday, January 28, 2014

TNX 10-Year Treasury Note Yield Daily Chart

The red lines showing the overbot conditions, rising wedges and negative divergence created the spank downs in early September and early January as forecasted. Ditto the positive divergence bottom although it was a cheesy bottom without the RSI becoming oversold and the MACD line likely wanted further weakness in late October. For the ongoing drop in yield for this year, yield is moving lower into the blue falling wedge. The indicators are weak and bleak wanting lower yields after any bounce occurs. The positive divergence in the stochastics creates the lift right now with yield up to 2.78% at this writing.

The fractal from September and October may play out again so watch the pink boxes. Back then, yield fell through the 50-day MA and then came back up to back test, and fail. A repeat of the fractal would send yield higher from the current 2.78% print towards 2.80%-2.85%, and then failure leading to lower lows. Yield likely has a lot of sideways ahead. The TNX weekly chart also created the spank down to begin the year with its negative divergence. The 20-week MA is 2.76%. Yield is trying to hold this important support level. If the 2.75%-ish level fails, yield likely wants to venture to 2.5%-2.6%.

In the near-term, a few days forward, yield is likely to move sideways through 2.75%-2.85% and then roll over to the downside again moving towards 2.5%-2.6%. A bottom may be placed for a more substantive bounce from 2.50%-2.65% but a move higher for yield will be challenged here on out. As the weeks and months play out, yield will likely stagger sideways through 2.4%-2.8%, perhaps for the whole year forward. The door must remain open for a potential move to 2.1%-2.4% range if 2.5%-ish fails. 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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