Monday, May 09, 2011

US 10-year Treasury Yield Bearish Fakeout

In a previous post I highlighted the bullish potential breakout of the US 10-year Yield Note but it turned out to be a false breakout just two days after. It was an early warning sign of the commodities, dollar and equities markets last week's corrections due to the break in the cemented inter-market (asset classes) relationships: bonds down (yields up), dollar down, commodities and equities up.

In the weekly chart above we notice new lows for the yields piercing the last Fibo fan level and potentially heading even lower towards 2.9 if this area gives in. In the daily picture below we see a monthly three push higher which usually has a bearish resolution. A clear downtrend is in the process with potential target 3.05 - 3.10 area (SMA200, 50% retracement and 21-day cycle line). Below we have the mentioned 2.9 (last Fibo retracement and previous congestion area).

No comments: