TNX 10-Year Treasury Note Yield Daily and Weekly Charts; Overbot Yields (Oversold Note and Bond Prices); Negative Divergence Developing; Upper Band Violations

Inflation and reflation chatter is all the rage these days as the US remains mired in disinflation and deflation. Yields will move higher in the future but the debate is over the near-term with one-half of Wall Street saying up and the other half down. That is a change because back when Keystone called that bottom in yields last summer due to the possie d the entirety of Wall Street exclaimed, "Blasphemy!" They were wrong as usual and yields move higher.

The surprise is the continued upside in yields. From the prior charts the yield would have been expected to top out about now or next week on the weekly basis but the weekly chart shows the indicators remaining long and strong. Three weeks ago the MACD line was the only indicator long and strong. The Fed, ECB, PBOC, RBA, BOK, and others, the whole Hee-Haw gang, are intervening in markets and/or jawboning to keep try and keep stocks pumped to protect the wealthy class.

You know, the 10-year yield typically tops out in the first half of the year. Oh, you did not know that? It is March already thus, there is an extremely high likelihood that yields will hit their top over the next 12 weeks. But how does this reconcile with everyone correctly thinking that yields will rise in the future. Well, when's the future? You can see yields topping out later this month, or the beginning of April, and then dropping lower for a multi-week and few-month drop, and then up again which would be the end of the year with yields at about where they are now.

The daily chart shows yield climbing the upper band. The move is euphoric for yields that move into a rising wedge pattern that is bearish. The blue lines show neggie d across all indictors except for the MACD. The Aroon is at maximum euphoric yields (which is maximum negativity in bond prices) with nowhere to go except towards bullish bonds which is price up yield down. That is what the chart indicators say sans the MACD. The TNX daily chart will top out on Tuesday. It needs a jog move (down-up) to give time for the MACD to go neggie d and the top will be in. Thus, Yields will likely dip on Monday, then back up Tuesday and that is the high in yields on the daily basis. Yield will then drop for several days and target the upward moving middle band, the 20-day MA, at 1.34%, looking for support. That 1.38%-1.42% range may be a good downside target range say for the back half of the week into the early next week. Now that the world's problems are solved on the daily what about the weekly.

The TNX weekly chart is not as straight foward. The Aroon is also euphorically bullish on yields which is actually maximum bearish Treasuries (lowest price, highest yield). The last TNX weekly chart highlighted the blue gap and surprisingly, yield ran parabolic. Well, not a surprise once the central banker gums started flappin'. The blue lines show negative divergence for the stochastics and overbot conditions on the RSI and stoch's, bearish factors for yield direction, but the orange lines show long and strong indicators wanting more highs in yield on the weekly basis. Two or three weeks ago, this chart only needed the MACD to go neggie d to call the top. That is why you have to wait until all the kittens are herded, and all neggie d, before you can call the top in yields.

The RSI, histogram, and perhaps ROC, should all go neggie d after one jog, which is down-up, so 2 weeks of time. The MACD may either top out with the others in 2 weeks, or as is often the case, another jog pattern may be needed for the pesky MACD to go neggie d. Confound it, my man! What does all this gibberish mean? You're talking a foreign language! Let's marry the two charts. In technical analysis, you are always dealing with five time frames; minute, hourly, daily, weekly and monthly, in essence, playing quintuple chess.

The daily chart is topping out with yield early in the week and dropping for several days. This gels with the weekly receiving a pullback, then yield comes back up for a matching or higher high as compared to these current numbers. 2 weeks out you expect all the weekly chart indicators to be neggie d with the MACD a mystery. Keystone is a poet and he knows it. The weekly chart in 2 weeks will provide the answer. Thus, yields top over next 2 days, then down several days, then back up for another high in yield next week or the week after expecting a top in yields, perhaps for the year, between 3/26/21 and 4/12/21.

TBT is the same chart so it would be shorted starting early in the week but only for a nimble speculative trade that lasts a few days. Ditto TLT which is a mirror image chart so this ETF will bottom Monday or Tuesday and run higher for a few days. These trades then reverse because the weekly chart is not yet topped out so you have to be agile. The simpler trade, and prudent move, as has been referenced since the TNX charts were posted 2 or 3 weeks ago, is to simply wait for the MACD to go neggie d on the weekly and you will know the top was in and you could then jump on the TBT short and/or TLT long for several weeks. Keystone does not hold either one long or short and does not have any trades in the Treasury area right now.

The lines above show key levels at 1.62%, 1.69% and 1.92%. Above that is the 200 MA. If yield rolls over this week as explained, and tops out now, it will come back up again and likely tag the 1.69% but it is likely it would hold. If not, maybe 1.72%-ish will hold. Keystone's 80/20 Rule says 8's lead to 2's so the 1.58% opened the door to 1.62% which occurred. 1.68% would open the door to 1.72%. Looks like the 10-year yield may top out at the back half of this month, maybe a few days into April, at 1.62%-1.72%, perhaps testing 1.69% during an intraday session, and then dropping for multiple weeks perhaps down to 1.42%. The charts will be revealing new secrets by then.

The universal business commentary and Wall Street forecast is for the big yield boogeyman to sink stocks. Pundits proclaim that the economy is getting better so yields are moving higher. The more likely outcome is stocks dropping with yields also dropping which no one talks about. The Senate approves the $1.9 trillion fiscal stimulus bill so the House will approve and President Biden on Tuesday. This week we find out if it is priced-in, or if it is a sell the news event or maybe both. 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 Monday Morning, 3/8/21, at 6:38 AM EST: US dollar 92.20. Euro 1.1876. VIX 27.32. S&P -22. 10-year 1.59%. Bitcoin 50.3K.

Note Added Monday Afternoon, 3/8/21, at 12:53 PM EST: USD dollar 92.31. 10-year 1.60%.

Note Added Tuesday Morning, 3/9/21, at 6:42 AM EST: USD dollar 91.92. 10-year yield drops to 1.52%. Bitcoin 54.2K.