Monday, February 15, 2016

TNX 10-Year Treasury Note Yield Weekly Chart

Yields have fallen out of bed over the last six weeks the opposite that would be expected since the Federal Reserve has started a rate hike cycle. Comically, the Fed still has four rate hikes on the table for this year while Fed Funds futures now price in zero hikes into early 2017. As stocks tumble lower, investors flock to the perceived safety of Treasuries sending bond and note prices higher and yields lower. The sideways triangles project a downside of about 70 basis points if the lower trend lines fail, which they did, so the target is at 1.50%-ish. Yield came down to 1.52% which is close enough for govt' work.

Yield has violated the lower standard deviation band so a move back to the middle band is on the table going forward. Stocahstics are oversold. Using the intraweek low, positive divergence exists with the indicators. This hints that there is likely lots of sideways ahead for yield. On the 10-year monthly chart, there is a sideways vibe as well. Yield may oscillate through the sideways 1.65%-2.10% channel for the weeks and months ahead. There remains some downside momo in the near therm for yield. A few months out the potential must be left open for the monthly chart to develop a downward bias and create lower lows in yield in te second half of this year. 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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