Remarkably, 10-year yield has declined beneath its December 2008 "crisis" low of 2.04% to a new "generational low" of 1.94% so far, as global money continues to flow into U.S. Treasury paper (despite its suspect rating downgrade in August).

Purely from a technical perspective, all eyes now are on the behavior of weekly RSI (momentum), which so far has NOT confirmed recent yield weakness from 2.30% and which we should consider a potential warning signal that 10-year yield is in its price capitulation phase.

Downside target zone: 1.78% to 1.46% within a panic low followed by a vicious, sustained upside reversal.

For those thinking that the UltraShort 20+ Year T-bond ETF (TBT) has to be a buy somewhere down here, well, yes "the buy" is getting closer, but my intermediate term work on 10-year YIELD argues that benchmark yield might still need to press 15 to 50 basis points lower in the days ahead, reflecting weak economic data, panic flight to safety, fears that Europe is disintegrating, etc.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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