Thursday, January 19, 2017

TNX 10-Year Treasury Note Yield Daily Chart; H&S

The rising wedge, overbot conditions and neggie d (red lines forecasted the top in yields which occurs. If you remember, in early and mid-December, pundit after pundit stood on soap boxes on television proclaiming that 3.00% is on the way and likely to happen very quickly. Wrong. All they had to do was look at the neggie d and they would not have been making such foolish statements.

Yield trends lower into the falling wedge, oversold stochastics and positive divergence with the histogram and stochastics creating the couple-day bounce in yield. Yield is printing at 2.44% as this is typed (blue dot).

The RSI and MACD line are weak, sloping lower, hinting that there is unfinished business lower. The 20-day MA at 2.45% is overhead resistance while the 50-day MA at 2.35% is support and the moving averages are squeezing in so yield has to choose a direction. If yield breaks out above 2.45% the 2.50% resistance would be targeted next.

A H&S (head and shoulders) pattern is in play with the neckline at that 2.30%-2.35% range and head up at 2.60%. A failure from 2.30%-2.35% would send yield down to the 2.00%-2.10% area. There are some juicy gaps that need filling below 2.30%.

The pink box verifies that the rise in yields from October into this year was a strong trend higher. Until now. The ADX drifts lower to 25 signaling that the up in yields is no longer a strong trend in this daily time frame. There is likely sideways choppiness ahead through the 2.30%-2.50% range. Note and bond bears will rejoice if yield moves up through 2.50% and 2.60% (lower prices higher yields) while bond bulls will celebrate if yield falls through the 2.30% support (higher prices lower yields). 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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