UST10Y US 10-Year Treasury Note Yield Weekly Chart; Sideways Symmetrical Triangle Breakdown; YIELD CURVE DIS-INVERTS FOR FIRST TIME IN OVER 2 YEARS

Here is an update of the ongoing sideways symmetrical triangle pattern that Keystone previously described. It is obvious how the sideways triangle resolved; to the downside in dramatic fashion. Notes and bonds are a different animal than stocks so yields that drop dramatically means traders are buying Treasuries with both fists (price up, yield down). The stock market is sold off in force and some of that dough makes its way into notes and bonds for perceived safety.

Comically, as Keystone has explained, the investment banks have been unloading stock market shares to Joe Sixpack, Jane Windedrinker and Carlos Bagholder over the last few months (distribution), and placed that money and profits into Treasuries now enjoying more gains. Meanwhile, the three sucka's are standing there looking at each other realizing they are the bagholdin' sucka's that got caught up in the banksters latest pump and dump scheme. It's funny. Now Warren Buffett comes clean that he has been selling off BAC and AAPL like a madman while analysts and his sycophants on television are telling the sucka's to buy. Pump and dump, baby, how do you think he got rich? Enjoy your bed of money, Warren, you can't take it with you, buddy.

Anyhoo, there are actually two triangles we can draw with blue and purple crayons. Keystone likes purple crayons because they taste like grapes. For the blue triangle, note that yield tried to break out higher, fighting and fighting, as all the Wall Street analysts said yields have nowhere to go but up, but then yield fell back into the triangle and collapsed out the bottom. This behavior, of an upside fake-out with triangle patterns, was explained in the previous post.

For forecasting, Keystone does not like using the vertical side of the triangle at the end, he likes to come in to the first touch and use that vertical. In both cases, those lines run from about 3.9% to 4.8% a difference of 0.9 percentage points. That is the move to be expected out of the triangles. There is no use providing upper targets since yield has now committed to the downside.

Yield fell out of the purple triangle at 4.4%, and note that it also came up for a back kiss at the apex, that was successful, and then completely collapsed. That is a commitment to the downside. 4.4% minus 0.9% is a 3.5% target. The blue triangle breakdown occurs from 4.2% with no back kiss yet occurring, it only happened last week. 4.2% minus 0.9% is 3.3% downside target. Thus, a landing zone of 3.3% to 3.5% is in play for the weeks ahead.

This is using the vertical sides that are in one touch. If you use the triangle end vertical lines the projections would drop to 3.0%. There is uber strong support at 3.3%-ish. If that is lost, it is lights out. 3.0% would be guaranteed and then likely 2.7%-2.8%.

The RSI, MACD and histogram are weak and bleak wanting lower lows in yields but the stochastics are possie d and oversold wanting yield to bounce for a week or so to catch its breath after that punch to the gut last week.

The ADX shows that the big up in yields in 2022 was a strong trend higher (pink box) but that petered out as 2023 started. Yields stumbled sideways in 2023 but then indicated a strong trend higher again, on the weekly basis late last year. However, that was short-lived and the strong trend higher in yields ended last December. As yields fall, watch the ADX. If it moves higher above 25 and then 30, it will tell you that the down move in yield is very strong and sustainable on the weekly basis.

What does all this mumbo-jumbo mean? The sideways symmetrical triangle breakdowns tell you that the 3.0% to 3.5% range is likely on tap for the 10-year yield in the weeks ahead. The daily chart remains weak and bleak wanting a few more days of lower yields. Thus, probably more downside and choppiness for yield in the days ahead, then a small upside move for a week or so, then a roll over lower with yields dropping on the weekly basis towards the 3.0% to 3.5% range going forward. Simply watch the possie d and neggie d on the charts to guide any trades.

TLT jumped higher like a rocket and TBT collapsed down the cellar stairs as mentioned in the previous analysis. Keystone is not playing any Treasury ETF's or derivatives 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.

It is great to see hostages freed from scumbag Dictator Putin's prisons in dirtbag Russia. Decades ago, Tony and the Girls (Dawn) told the story about a man coming home from prison not knowing if anyone cared about him anymore; they cared. Tie a Yellow Ribbon.

Note Added Sunday Evening, 8/4/24: The cascading global stock market selloff, quickly becoming a crash, continues rotating around the world. The US yield curve (2-10 spread) is up to -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.76% and 10-year yield 3.72%.

Note Added Monday Morning, 8/5/24, at 3:30 AM EST: The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.79% and 10-year yield 3.75%.

Note Added Monday Morning, 8/5/24, at 4:40 AM EST: Traders now estimate a 60% chance that the Federal Reserve will cut 25 bips within the next week. Oh my. That is panic. If the Fed would do that, it would create panic that the economy is far worse than thought, however, investors are already panicking running around with their hair on fire during the global stock market rout since Thursday. The US yield curve (2-10 spread) is at -4 bips a hair from dis-inversion, and recession. The 2-year yield is 3.81% and 10-year yield 3.77%. 

Note Added Monday Morning, 8/5/24, at 7:03 AM EST: The US yield curve (2-10 spread) is at -1 bip almost dis-inverted (bull steepener) and probably, finally, signaling recession. The 2-year yield is 3.7581% and 10-year yield 3.7435%. The S&P futures are down -148 points, -2.8%. VIX is 50+.

Note Added Monday Morning, 8/5/24, at 7:33 AM EST: The 2-year and 10-year yields sit at 3.73% remaining only one tiny hair inverted. The S&P futures plummet -163 points, -3%, to the lows of the session. VIX 50.68. NVDA pukes -13%. MSFT collapses -7%. Bitcoin is at 50,947.

Note Added Monday Morning, 8/5/24, at 8:42 AM EST: The 2-year is at 3.6559% and 10-year yield is at 3.6672%. Sound the Seven Trumpets!!  THE US YIELD CURVE DIS-INVERTS FOR THE FIRST TIME IN OVER 2 YEARS. Normalcy returns with the 10-year yield a single hair above the 2-year yield.

Note Added Monday Evening, 8/5/24, at 6:02 PM EST: If you blinked during the dis-inversion of the yield curve, you missed it. The yield curve re-inverted quickly this morning with the spread widening again. The 2-10 spread then dropped from the slightly positive number back down to the -0.13% support. The 2-year yield is at 3.92% and the 10-year yield is at 3.79%. The zero level and dis-inversion is obviously a big deal so it would be expected for yield to stab at the zero resistance once or three times before thrusting up through. The spread likely re-inverted as traders believe that a 50-bip cut is likely not coming. The hook pattern is continually spanked back down delaying the recession.

Note Added Tuesday Morning, 8/6/24, at 4:32 AM EST: The 2-year yield is at 3.97% and the 10-year yield is at 3.85%. The spread is at -0.12 bips. The back kiss is successful so far; the -0.13% support is holding.

Note Added Tuesday Afternoon, 8/6/24, at 4:15 PM EST: The 2-year yield is at 3.98% and the 10-year yield is at 3.90%. The spread floats higher to -8 bips. The back kiss is successful so far; the -13 bip support is holding.

Note Added Wednesday Morning, 8/7/24, at 4:32 AM EST: The 2-year yield is at 4.00% and the 10-year yield is at 3.91%. The spread is at -9 bips. The -0.13% support is holding. The spread has been at -9bips, with that brief increase to -8 bips, for the last half-day as the yields fluctuate up and down. The BOJ stepped in verbally to weaken the yen and create lift in US stocks.

Note Added Wednesday Morning, 8/7/24, at 9:09 AM EST: The 2-year yield is at 3.99% and the 10-year yield is at 3.93%. The spread is at -6 bips. 

Note Added Wednesday Evening, 8/7/24, at 8:33 PM EST: The 2-year yield is at 3.96% and the 10-year yield is at 3.94%. The spread is at -2 bips. Only 2 measly bips from complete dis-inversion, and recession.

Note Added Thursday Morning, 8/8/24, at 8:50 AM EST: The 2-year yield is at 4.04% and the 10-year yield is at 3.99% after the US Jobless Claims happy data. The spread is at -5 bips. 

Note Added Friday Morning, 8/9/24, at 3:18 AM EST: The 2-year yield is at 4.02% and the 10-year yield is at 3.96%. The spread is at -6 bips.