Another Pusher Higher for Treasury Yields?
Treasury yields have been falling since October as traders look for inflation to cool. But now there could be signs of a rebound.
This chart of the 10-year Treasury note’s yield highlights the series of lower highs in November and December. TNX kept squeezing downward in January, but this month jumped back above the trendline. Is the period of consolidation ending? If so, will the longer-term uptrend resume?
Second, notice the slightly lower lows in January and early February. The resulting trendline has a weaker downward slope than the higher line along the highs. That’s formed something of a descending wedge -- a potential reversal pattern pointing to the upside.
Third, the Relative Strength Index (RSI) made higher lows at the same time TNX made slightly lower lows. Some chart watchers may consider that a non-confirmation of the lows, or positive divergence. Again, such an interpretation would point to the upside.
Finally, yields have remained above the 200-day simple moving average (SMA) in green. They’ve also returned above the 50-day SMA. Neither of those facts point to yields going lower.
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TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
This chart of the 10-year Treasury note’s yield highlights the series of lower highs in November and December. TNX kept squeezing downward in January, but this month jumped back above the trendline. Is the period of consolidation ending? If so, will the longer-term uptrend resume?
Second, notice the slightly lower lows in January and early February. The resulting trendline has a weaker downward slope than the higher line along the highs. That’s formed something of a descending wedge -- a potential reversal pattern pointing to the upside.
Third, the Relative Strength Index (RSI) made higher lows at the same time TNX made slightly lower lows. Some chart watchers may consider that a non-confirmation of the lows, or positive divergence. Again, such an interpretation would point to the upside.
Finally, yields have remained above the 200-day simple moving average (SMA) in green. They’ve also returned above the 50-day SMA. Neither of those facts point to yields going lower.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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