Wednesday, June 10, 2009

Technical Sign Posts: 10 Year Treasury Yield

No matter which way the prevailing winds blow, no asset ever goes in the same direction all the time. So while 10 year Treasury yields may have the tailwinds to move higher over the next 12 months at least, it doesn't seem likely that we will see 5% yields all at once. In fact, looking at monthly and weekly charts of the 10 year Treasury yield (symbol: $TNX.X) suggests that we are coming into significant resistance levels around a yield of 4%.

Figure 1. $TNX.X/ monthly

Figure 2. $TNX.X/ weekly


Mark said...

Agree on thought process

a lot of things need to revert relatively soon to a mean.

but timing is everything

Anonymous said...

I never understood people who bought 10 year T-notes at an interest rate of 2 %. In turbulent times, inflation is one of the risks. To compensate for that risk, the interest rate should be 5 % or even higher. Back in the 1980s when the Fed had to fight inflation, the interest rate shot up to 15 %.