TNX 10-Year Treasury Note Yield Weekly and Daily Charts Inverted H&S Patterns Negative Divergence

The 10-year yield is up to 1.90% this morning. The red liens show hte negative divergence spank down over the last week or two.  The indicators remain weak and bleak so lower yields are desired moving forward. Oddly, however, the asset relationships are not acting properly over the last couple weeks, a down in yields is not in conjunction with the equities markets selling off. The Fed's money-pumping appears to override what the markets prefer to see.  The blue H&S is head at 1.40% and neckline at 1.85%, so target is 2.25%, call it 2.30%. Note how the yield has back kissed the 1.85% neck line so as far as the inverted H&S goes, it wants to make its way up to 2.30%.  But, not so fast.

The 10-year yield was in the cellar last summer and that recovery move is now many months old. The indicators were long and strong as the yield made its way higher to the 2.05%-ish top a couple weeks ago. Now, however, the indicators are negatively diverged and weak and bleak and prefer the downside ahead not the upside. Therefore, lots more sideways action may continue along for the months ahead with a move through 1.55-2.05%. The move up in yields this morning would be perceived as a dead cat bounce with bond yields up and bond prices down, but this would be expected to reverse and for yields to move lower moving forward. If this occurs it will be interesting to see if the equity markets follow along lower, or, if the Fed easy money is too powerful and the broad market upside orgy will continue forever with Chairman Bernanke playing the part of Caligula. 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.