U.S. Treasury Bonds
Interest-Rates / US Bonds Apr 05, 2013 - 06:57 AM GMT
As I scanned my charts I thought I’d got a little off the beaten track to highlight something that is deeply affecting us. That is Treasury yields.
The reason I said this is because Treasury yields may have made their Master Cycle low today, or may do so in the next few trading days. The Cycles Model captures this event by showing that yields may have been stopped at the mid-Cycle support line at 17.53. There may be a challenge or a probe lower, but the uptrend line is just beneath it, so we will know very soon whether it is successful in turning Yields back up or not. If so, the uptrend in yields is preserved.
Today is Day 23 in the new Treasury Master Cycle. If the decline in yields stops within a week, we will have a left-leaning (bullish) cycle in Treasury yields.
The next probable target for TNX is a potential inverted Head & Shoulders neckline at 24.00. A push back from the potential trendline would indicate a Leading Diagonal pattern is developing with a pullback as far as 19.00 to follow.
The alternate view suggests a run through 24.00, invalidating the Head & Shoulders formation, but just as bullish, since either target would likely be Cycle Top resistance at 34.00.
In summary, Treasury yields may be on an upswing that could double rates in the intermediate term (6 months to a year).
Regards,
Tony
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