TNX 10-Year Treasury Note Yield Daily Chart

The last five months show a sideways channel thru 1.70%-2.40%. For the last two months the range is tighter, 1.80%-2.15%. The lower low in price over the last month, backed up by lower lows in the indicators, signal that yield will want to move lower again towards the 1.80% level. The annotation may have gotten a bit out of control on this one, but if you squint thru the spaghetti, the teal lines show how a sideways triangle vibe is in progress now. The top rail of this triangle forms a confluence with the 50-day MA at 2.05%. Note that yield is now fighting to get thru resistance at the 20-day MA at 1.98%; this outcome is important. Watch the RSI 50% level for clues.

The 10-year yield should favor sideways movement for the weeks and months to come. In the near term, over the next couple months, the start of 2012, as the globe deals with the Europe debt crisis, money will seek the 10-year, hence, price up, yields lower. This scenario would jive with the 20-day MA now spanking down price. Projection is sideways yields for the forseeable future. In the near term, the days and weeks ahead, yields should pull back down as the Europe debt crisis worsens and U.S. deflation concerns grow. A loss of the 1.80% level and lower will place Chairman Bernanke on alert to prepare for QE3. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.