Sunday, December 27, 2015

UST2Y 2-Year Treasury Yield Weekly Chart 6-Year High

The 2-year yield has launched higher after Fed Chair Yellen hiked the key rate by one-quarter basis point. The 2-year yield is above 1% to 1.03 at levels not seen since April 2010 six years ago. Traders are throwing the 2-year overboard (lower prices higher yields).

The yield has been in an uptrend since bottoming in 2011. The move higher in yield (lower prices) was a strong trend until late 2014 when the trend petered out (pink box). Yield staggered sideways into an ascending triangle pattern (bullish) and pierced up through due to Yellen's hike. The ascending triangle targets 1.05%-ish essentially where yield is at satisfying the pattern.

The RSI and MACD line are long and strong. The stochastics are overbot and neggie d, the histogram is also negatively diverged. Thus, 1 to 3 candlesticks are needed to roll yield over to the downside again which is 1 to 3 weeks time. A down-up-down pattern for  yield is on the table over the next couple weeks or so (down yield due to stoch's and histo then back up in yield to satisfy RSI and MACD line and then potential roll over in yield if the MACD line rolls over). The MACD line will need to roll over and then you will know a near-term top in yield is at hand. There is likely lots of sideways 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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