TNX 10-Year Treasury Note Yield Weekly Chart; Oversold; Falling Wedge; Positive Divergence; Lower Band Violation

All eyes are watching the 10-year yield as the Fed meets today and Chairman Powell pontificates on the markets tomorrow. The hourly, daily and weekly charts are exhibiting positive divergence behavior wanting to see yields rise (notes and bonds selling off). Some of this occurs today and at least for now, the money leaving bonds (lower prices higher yields) is going into stocks creating the lift in equities.

The overbot stochastics and falling green wedge are indicators that point to upside in yields ahead. The RSI is not yet at oversold levels so perhaps that is something in store for a few months down the road. The green lines show positive divergence across all indicators so yields should float higher for a few weeks. Higher yields will send utilities lower.

The lower band is violated in December so the 10-year yield needs to retrace to the middle band at 2.79% which is also the 20-week MA. On the daily chart, the 2.66% level is in play. Yield is at 2.62% as this is typed at 9:51 AM EST on Tuesday, 3/19/19. If yields get some legs higher, the 50-week MA at 2.89% will be on tap. Yields are set to move sideways to sideways higher for the weeks ahead, however, the Federal Reserve is holding all the cards. The central bankers are the market.

Of course everything has caveats today into tomorrow since King Powell holds the future of all markets in the palm of his hands. This is humorously called free market capitalism. Yields move lower if Powell is dovish saying that no rate hikes are on tap this year or perhaps one, but yields will likely move higher if he hints that market participants are too dovish (one or more rate hikes may be on tap this year instead of none). The TNX chart wants to see yield move higher. 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.

Note Added 5:48 AM EST on Thursday Morning, 3/21/19: Chairman Powell drank from Wall Street's Holy Chalice, delivering the monetary message written in the sacred tablets brought down from on high. Powell releases 11 white doves into the air representing the 11 years of ongoing central banker dovishness and promises to print money for as far as the eye can see. Bullish traders cheer and begin buying stocks like crazy. Treasury yields plummet. Powell outperforms his expected dovishness by becoming uber dovish. The 10-year yield plummets to 2.54% after the Fed announcement yesterday afternoon. The stock market came back to earth and chops sideways as global traders realize that the Federal Reserve may see something wrong with the economy. Stocks may not perform well going forward if the economy is faltering and this worry may be overriding the expected bullish joy every time a central banker promises to print more money. The central bankers are the market. The Philly Fed data this morning is important.

Treasury yields are at; 2-year 2.39%, 5-year 2.32%, 10-year 2.52%, 30-year 2.97%. The 2-10 spread is down to 12.5 basis points. The 2-10 dropped to 9 bips last year so it is starting to tease towards inversion again. The 2's-5's are inverted by 7 bips. All yields are sub 3%. The German 10-year bund yield is down to 0.05% on the verge of going negative. Many yields remain negative in Europe such as the 10-year yield in Switzerland at -0.40%. The world's wealthy gladly pay Switzerland for the privilege of parking their money in the Alps. It will be a big deal if the German bund goes negative. The Fed decision creates the drop in the Treasury yields, however, the charts remain basically the same as presented above. In fact, the lower yield now firmly creates positive divergence on the daily chart. The price action likely creates a week or three of choppiness but in general a recovery in yields, after, say a bottom over the next week or three, remains an expectation.

Note Added 8:19 AM EST on Thursday Morning, 3/21/19: The 10-year yield slips below 2.50% to 2.49% the lowest since January 2018. The 2-10 spread is at 11.8 bips. Global investors become more worried about the world's economy and buy US Treasuries seeking safety (prices up yields down).