UST10Y 10-Year Treasury Note Yield Monthly Chart; Yields Topping-Out and Set to Begin Multi-Month Down Move

The US 10-year note yields are topping out on the long-term monthly basis and set to begin a multi-month down move. Say what?! How can that be? All of Wall Street say yields have nowhere to go but up and it is only a matter of how fast. That tells you that Wall Street is wrong.

Yields topped-out in late 2018 with the red rising wedge, overbot conditions and negative divergence. Note that the MACD line did not go neggie d and left the door open that yields wanted to make another high. Alas, the COVID-19 pandemic hits, spawned by a likely lab leak from sick gain of function research conducted by the CCP communists with money provided by the NIH (Collins) and NIAID (Fauci).

As panic hits global markets and people begin dropping over dead, especially old and fat folks, US Treasuries are bid as people seek perceived safety. Bond and note prices jump higher as folks scramble to buy the paper so yields drop like a sack of potatoes in 2020. Many thought the world was ending and everyone would get sick and die. You only have one life to live, so live it.

Yields recover in 2021 forming the cup and handle (C&H) pattern (blue). The brim is at 1.75 and base at 0.55 so that is 1.20 difference so the breakout above the brim targets 2.95% (1.75+1.20) easily attained. The 2-leg bull flag pattern also plays out (purple) and interestingly, yields pick up from where they left off in late 2018 and early 2019 before Fauci's pandemic mess started.

If you snap your fingers and the pandemic did not occur, yields have continued the trend higher that was in play in 2018/2019 (the black arrow; remember, the MACD line wanted one more high in yields but the chart fell apart anyway; global traders and insiders knew trouble was coming from China and their sick experimentation and leaks of the coronavirus disease).

The 10-year yield prints at a high of 4.30% this month with another 2 weeks remaining. The 10-year yield is at 4.26%. All the chart indicators are in negative divergence forecasting a long-term top now in place. A multi-month down move in yields will begin any time and continue for many months if not a year or two. What?!! All of Wall Street says the opposite. This guy does not know what he is talking about? Who is this Keystone joker? There is no joke, it is what it is. Keystone is telling you what will happen as he sits back and enjoys nature.

Note the RSI has some momo over the last month so there may be a jog move for the next couple months (yields drop for about a month but then recover and move higher again for a month but never get back to the current highs and then roll over and die to begin the multi-month move lower). So yields are topped-out now and you can expect much lower yields going into the end of the year and next year the complete opposite of what the Wall Street analysts predict.

A troublesome geopolitical picture will sink yields. Like the pandemic, people will seek perceived safety and that is US Treasuries so as they flock to the bonds and notes buying at any price yields will drop like a rock. Maybe the Ukraine War starts going south? China's economy is crumbling experiencing a real estate crash like the US in 2007-2008. There is shaky stuff occurring in Japan. The US has been in a housing recession all year long and is also in a manufacturing recession. In the past, this behavior guarantees that a recession is occurring but not in these days of easy money. The recession is taking longer to arrive but do not be surprised if the future data will show the recession starting now.

You can use the shorter time duration charts (weekly, daily and hourly) to time your trades on Treasuries but know that over the long term, the coming months and perhaps year or two forward, yields will trend lower. Who do you believe? Everyone on Wall Street or Keystone sitting on a lawn chair enjoying nature in the Appalachian Mountains? Keystone is not holding any Treasury positions long or short currently. 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 Tuesday, 8/22/23: Yields continue inching higher yesterday and then relax again today. The 10-year sits at 4.30% running up to 4.34% yesterday. Mortgage rates are the highest in over 2 decades with the 30-year fixed moving towards 7.5%. The 30 was 200 bips (2 percentage-points) lower a year ago. Wall Street analysts continue touting higher rates for longer and the soft landing/no recession outcome. There are two potential outcomes ahead; recession or the soft landing/no recession scenario. The yield curve (2-10 spread) will dis-invert, now in the -60's bip range, and steepen going forward regardless of the outcome ahead. The yield curve has to re-steepen for a return to normalcy, whatever that is now that America's crony capitalism system is in its last throes. Remember, the -40 bips area for the 2-10 spread will take out the previous highs and announce a recession with high probability. Thus, for the two scenarios, a soft landing and no recession outcome means the long duration yields (10's and 30's) will move higher faster while the recession scenario will send the 2-year yields lower faster. The technicals say yields are topping-out as explained above. Choose your poison. Poison in the Well.

Note Added Thursday, 8/24/23: The yields are; 2-year 4.98%, 5-year 4.37%, 10-year 4.20%, 30-year 4.27%. The 2-year popped above 5% and pulls back. The 10-year hits 4.34% and then pulls back. Yields drop due to the neggie d explained above. The 2-10 spread (yield curve) remains inverted at -78 bips. The long end yields come down faster than the short end because Pope Powell speaks tomorrow morning. There is more drama ahead.