TNX 10-Year Treasury Note Yield Weekly Chart Overbot Rising Wedge Negative Divergence Inverted H&S's

The TNX weekly chart shows the ongoing inverted head and shoulders patterns in brown. The target of 2.8%-2.9% is now satisfied, however, the alternate inverted H&S's with neck lines at 2.3% and 2.4% target far higher yields at 3.2% and 3.4%, respectively.  Note how yield was rejected by the 200-week MA in early 2011 but now, yield is punching up through, definitely a bullish indication for yields (bearish for note and bond prices). A move back down to test the 200-week MA, as well as back kiss the 2.4% and/or 2.3% levels is on the table. The spike higher is quite dramatic, from 1.6% to 2.9%, over 130 bips, in only 3-1/2 months, and needs a rest to absorb the move.

The MACD line has additional upside juice so this says yield may hang around in the 2.8%-3.0% area for a few days or week or two, but the negative divergence should be universal across all indicators at that time and then roll yields over to the downside. Most everyone on Wall Street is looking for higher and higher yields, and they may be correct, but the charts hint at more of a move through 1.8%-3.2% perhaps for the next 2 or 3 years. This surely would be a surprise since many are expecting 3% any day and 4% in 2014. TLT is the ETF that moves higher if bond and note yields move lower while the TBT is the ETF that moves higher if yields continue moving higher. Keystone has opened a position in TLT. 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.