TNX US 10-Year Treasury Note Yield Weekly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation

The 10-year yield launches higher on the tight Band squeeze (purple arrows). The Fed members keep flapping hawkish wings sending yields higher. The markets are trading off pure emotion and news bites these days. Money either flows into both stocks and bonds (yields lower) or out of both like the last few weeks (lower stocks and lower note and bond prices sending yields higher).

Traders and investors are afraid the Fed will break something as they raise rates higher and higher so that creates the anxiety in equities. As a global recession hits, and people lose their jobs, others will pull back spending causing more job losses. At some point forward, money will continue flowing out of stocks but some of that money will flow into the perceived safety of Treasuries sending bond and note prices higher and yields lower.

Over the last few weeks, however, stocks and bonds are both sold off mightily. The 2-year yield went over 4% and the 10-year above came up to 4% and now retreats.

The overbot conditions, rising wedge, and neggie d conspire to spank the yield lower. The top in yield is on a weekly basis with universal negative divergence so a weekly downtrend begins for yields. The upper band is violated so a move back to the middle band, which is also the 20-wk MA, at 3.12%, and rising, is on the table.

The ADX shows how the multi-month move higher in yields has lost its gusto. Each high in yields is met with a lower ADX number now at 29.63. The high 20's and higher denote a strong trend in place be it up or down but the move up in yields is fading.

The SPX chart hints at a rally for stocks in the weekly timeframe and the 10-year yield chart above says down for a few weeks. Thus, the same-o pattern will be in place where both stocks are bot and bonds and notes are bot sending yields lower. It will be interesting when this behavior shifts as stated in the first two paragraphs.

For the TNX monthly chart, another high in yields is needed. Thus, yields are set to relax and retreat for a few weeks but that will set up the next move higher, on the monthly basis, which will be above 4% and higher, probably over 4.3% as the year ends and 2023 begins. A lot depends on the recession currently lurking in the shadows.

Keystone does not have any trades on in this arena currently but the plays would be long TLT and short TBT for the next few weeks unless the Fed throws another curve ball. 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 9:54 AM EST: The 10-year yield is at 3.74%

Note Added Saturday Morning, 10/8/22: The 10-year yield moves higher to 3.88% as notes and bonds are sold off (lower price higher yield), along with stocks, after a slightly stronger than expected monthly jobs report yesterday. Nothing's changed with the chart above. The upside in yields has a little bit of momo with the RSI and MACD so this may try to keep yield elevated for a few more days (but overall both indicators remain negatively diverged). We can take a look at the TNX daily chart to see if anything is going on there.

Note Added Monday Morning, 10/10/22, at 10:25 AM EST: Bonds are not trading today due to the Columbus Day holiday. 10-year yield 3.888%. USD 113.15.