Don't Ignore This Chart!

Rising Treasury Yields may be Affecting the Homebuilders

The 10-year Treasury Yield ($TNX) surged from 1.6% to 2.6% and then consolidated for a few weeks. Yields could be starting another leg up as $TNX bounces off support this week. This is having a negative impact on homebuilders. Notice that the correlation between the 10-year Treasury Yield ($TNX) and the Home Construction iShares (ITB) turned negative in late May. ITB does not like something because the ETF is testing its 2013 low with a sharp decline this week.

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Arthur Hill
About the author: , CMT, is the Chief Technical Strategist at Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London. Learn More
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