TNX 10-Year Treasury Note Yield Lowest Close at 1.64% Since December 2012

The 10-year yield continues lower to 1.63% ending the week at 1.64% at a new record low going back to December 2012 (brown line). The intraday low yield this year is 1.56% in February so that level deserves respect. Yields will tumble lower if 1.56% fails. Lower yields maintain the ongoing deflationary vibe.

The neon blue lines show the downward-sloping channel in play with price at a lower trend line. Price has also violated the lower standard deviation band so the middle band at 1.81% and falling is in play. The indicators clearly show universal positive divergence over the last five months with an oversold Williams down at -97% (this indicator is overextended to the downside so yields should pop).

The yields appear too risky to trade right now. The TNX daily chart is setting up with positive divergence but the near term (hours and a couple days) are hinting at lower lows in yield. The 10-year yield may base this week in the near-term and provide a trade for higher yields, so an ETF like TBT would be in play for a long trade, or short the TLT. Keystone has no trade in these ETF's and probably will not play in this arena. Speculators may consider a TBT long trade, however, say beginning some time this week. It can be scaled into as yield searches for a temporary bottom in the near-term. If  you enjoyed gains in TLT over the last few months, it would be prudent to begin scaling out. Take the profits and sip some lemonade while lounging in the hammock out back.

Caution is required since sometimes charts can quickly breakdown from oversold conditions rather than bounce. These events occur during dramatic market upheavals so respect has to be maintained for further downside in yields. The monthly TNX chart hints that the 1.45%-1.65% area is where yield will base during the summer and then recover. Yields will probably head dead flat sideways for many months to come perhaps well into 2017.

The expectation is for yields to perhaps base this coming week, then move higher over the next few weeks (lower note and bond prices higher yields) say into July and August, then roll over to the downside say August-October, and that would be the long-term base for yields, say in the 1.45%-1.65% area, and then yields move sideways to sideways higher for the foreseeable future emphasizing sideways. 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.