Wednesday, July 19, 2017

TNX 10-Year Treasury Note Yield Daily and Weekly Charts; Death Cross; Downward-Sloping Channel

The moving averages are playing a key role with the direction in the 10-year Treasury yield. The TNX fell through the 100-day MA at 2.32% and then made a beeline for the confluence of the 20, 50 and 200-day MA's. A death cross occurs with the 50-day crossing down through the 200 (black circle). The blue lines show the downward-sloping channel in play.

The bracket formed by the 20-week MA at 2.31% and 50-week MA at 2.18% is key. These two moving averages are converging so yield is going to have to make a decision and that will likely set the path forward for the TNX. Yield gapped above the 100-week MA at 2.05% when President Trump was elected in early November. Yield never came back down to back kiss the 100-week as yet and it should show respect to the 100 at some point forward.

Use the MA's as a guide going forward;

100-day MA 2.32%; inflation is increasing and higher yields are coming
20-week MA 2.31%.
200-day MA 2.27%
20-day MA 2.27%
Yield is at 2.27% as this message is typed
50-day MA 2.26%
200-week MA 2.23%
50-week MA 2.18%
100-week MA 2.05%; deflation sends the US into a tailspin

Treasury note and bond bulls (higher note prices lower yields) will cheer if yield slips under the 50-day at 2.26% since a move to the 200-week at 2.23% will be on tap. If 2.23% fails, yield will next test 2.18%. If that fails, 2.05% is the next support. If the 2.05% level fails, serious trouble begins for the US economy and markets since the country will be falling into a deflationary spiral that the vast majority of Wall Street says will not occur.

Treasury note and bond bears (lower prices higher yields) will cheer if yield punches back up through that gauntlet at 2.27%. Yield will immediately run up to 2.31%. If yield moves above that 2.31%-2.32% resistance, yield will run far higher and the inflation proponents will throw a party. 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.

Note Added 7:26 AM EST: The 10-year yield bumped higher to 2.28% but is spanked back down to 2.27%. Yield is chomping away at that formidable resistance at 2.27% trying to break out higher. Yield may dance in that 2.27%-2.31% range today.

Note Added on Sunday, 7/23/17: The 10-year yield tried to break out above that 2.27% gauntlet late last week but was spanked lower. Yield then fell through the 50-day MA at 2.26% and sits exactly at the 2.23% support (the 200-week MA) this weekend. Yield will bounce or die from this level on Monday. A failure sends yield to 2.18% while a bounce will send yield back up to test the 2.27% gauntlet.

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