TNX 10-Year Treasury Note Yield Daily Chart; Fibonacci Retracements; H&S

Keystone posted the 10-year chart 2 or 3 weeks ago discussing the potential topping out in yield due to the negative divergence developing (red lines). The neggie d spankdown occurs. There is a head and shoulders (H&S) vibe with the chart now with necklines at either 2.35% or 2.30% which would send yield down to the 2.00% level which is also the 50% Fib.

The Fibonacci retracements are shown for the move up in yields from 1.34% to 2.62%. The Fib retracement levels are at 38%, 50% and 62%. Yield has only started to roll over and the 2.13% level, the 38% Fib retracement, is still a ways below. Yield drops and note over the last couple days the stochastics are oversold and positively diverged. This hints at a recovery move for yield on the daily basis. The MACD line is weak and bleak so after a bounce in yield, it should fall again perhaps to the apex of that falling wedge at 2.28% -ish. There are some juicy gaps below that will eventually need filled (brown circles).

The election day on 11/8/16 (blue circle) was a pivot point. For July-October, the brown channel was in play as well as the rising wedge. That purple rising wedge was ready to spank yield lower but instead, the surprise Trump win sent yields catapulting higher. Trump's policies are viewed as inflationary so yields have jumped higher (notes and bonds are sold off sending yields higher).

The door remains open to the 2.20% to 2.28% area but this is after a couple-few day recovery in yield. The banks report earnings tomorrow which may create drama. It will be interesting to see if yield comes down to 2.20% which is just above that gap. If yield would immediately collapse from there to 2.12% and lower, that would be an island reversal pattern. Otherwise, at some point forward, yield may simply come down to fill that gap at 2.12%-2.20%.

Thus, with yield at 2.36% a move higher to 2.40% may be on the table through early to mid next week, then down again to the 2.20%-2.28% area. At that time it will depend on the indicators, but a guess would be that yields do trend lower on a weekly basis. The 200-week MA is at 2.23% so yield may become sticky around this level in the days ahead or when yield decides to come back down. 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.