TNX 10-Year US Treasury Note Yield Weekly Chart; Overbot Yields (Oversold Note Prices); Rising Wedge; Negative Divergence Developing; Upper Band Violation

There is lots of talk about inflation nowadays. The Federal Reserve has been promising inflation since March 2009 when QE1 started but the jury remains out on the Fed's sick Keynesian financial experiment.  After 12 years, the wealthy class is filthy rich and the huddled masses are screwed. Let the class war begin.

The TNX is the 10-year yield on the US Treasury note like UST10Y and other tickers. The 30+ year bond rally had been trying to stabilize and finally find a bottom a year ago but that is when the bottom fell out with the coronavirus (COVID-19) pandemic. You can see in the February-March period last year how yields fell out of bed. Stocks were crashing so traders ran into Treasuries for perceived safety. Bond and note prices rise on this sudden demand sending yields dramatically lower. This excitement may repeat.

The purple arrows show the tight band squeeze that told you something big was at the doorstep. Bloop, the move is down during the covid crash. Stocks plummet, yields collapse. Yields bump around the bottom last year not doing much of anything. The Fed and Congress flooded the US and world with easy money to send stocks higher. Yield makes a cheesy bottom at the green arrow.

Late last summer going into Labor Day, yield drops but does not produce a matching or lower yield than March. Therefore, positive divergence cannot exist by definition. The green lines for the indicators are all sloping higher, long and strong, but it was not official possie d since yield did not make a lower low. Nonetheless, the chart tells you last August that you can no longer keep the TNX beach ball under water. It is all fueled-up with strong indicators as yield remains soggy. Yield begins the move higher (investors and traders selling off notes and bonds) from August to present.

Now, the stochastics are overbot. The word overbot with notes and bonds has a different meaning than a stock chart so do not get confused. Overbot yields means the note price is oversold. Oversold yields like March 2020 and August 2020, are overbot prices. Yields are topping-out right now so in other words the note-selling is coming near an end. Yields will stop moving higher over or within the next couple weeks. This gels with the overall short-term market expectations where US dollar continues higher, stocks tank, gold drops, and yields will drop.

The red lines show neggie d across all indicators as yield makes a new high, however, the MACD remains long and strong and wants to see one more matching or higher high in yield after the pullback occurs for a few days or week due to the neggie d with the other indicators. Thus, yields are either sent lower right away and they trend lower for a few weeks, or, yields drift lower this week, for a few days or so, but then next week will rise again to match the current yield values (then die). At that time, the MACD line should be neggie d and the top would be in (a simple jog move down for a week then up for a week).

Yield has tagged the upper band so the middle band at 0.86% and lower band at 0.60% is on the table. So the forecast would be for the 10-year yield to top out now or over the coming days. When the candlestick for the week begins printing today, simply check the MACD line to see if it goes neggie d, if so, the top on the weekly basis is now. If not, it will top out in a few more days. That would begin a multi-week down move in yields which again, would gel perfectly with the stock market selling off. Folks will be panicking dumping stocks and a lot of that money will run to the perceived safety of Treasuries sending note and bond prices higher, yields lower. The 10-year yield is at 1.0666%.

The TNX monthly chart bottomed with the weekly chart in the late summer last year. The  monthly chart shows long and strong indicators as yield moves higher so higher yields would  be expected in the monthly time frame. Thus, marry the weekly and monthly time frames and the 10-year yield will top out anytime over coming week or two, then yield moves lower for a multi-week drop, after that, possie d will set up on the weekly and a move higher will begin for yield in the weekly time frame and it will have legs for a few months higher (say yields drop, as stocks sell off, into February/March, and then yield moves higher after that for a few months).

TBT is the ETF play that mimics the 10-year yield so that would be a short for the weeks ahead and TLT is the ETF that would be a long play following the above analysis. Note the MACD remaining weak and bleak on the TLT weekly so it probably needs a week or so to bottom on the weekly basis. Keystone does not own either now but will perhaps buy TLT this week or next week. 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.