Don't Ignore This Chart!

$TNX - The 10 Year Bond Yield Loses Support


The 10 Year Bond Yield fell to new lows for 2014 today and made 6 month lows. This has been building for a while. There is one layer of horizontal support left for yields at 2.47% which is marked by the red line.

Usually when the yield curve starts dropping, this is not as positive for stocks. The yields fall as investors bid up the price of bonds.

The five year note chart ($FVX) also broke support today and the 30 Year bond yield ($TYX) has been falling for some time now.

While the long bond has been rolling for a while, getting multiple breaks of support on different durations of notes/bonds would suggest investors are looking for the safety of bonds across the yield curve.

This would bring into question the ability of the Nasdaq to keep rallying off last weeks lows. The early March 2014 high on the ten year note at 28.21 also marked the high on the Nasdaq market within a day. From March 6th on this chart, the bonds have made lower highs and lower lows which coincides with the trend in the Nasdaq.

Good trading,

Greg Schnell, CMT


Greg Schnell
About the author: , CMT, is a Senior Technical Analyst at specializing in intermarket and commodities analysis. He is also the co-author of Stock Charts For Dummies (Wiley, 2018). Based in Calgary, Greg is a board member of the Canadian Society of Technical Analysts (CSTA) and the chairman of the CSTA Calgary chapter. He is an active member of both the CMT Association and the International Federation of Technical Analysts (IFTA). Learn More
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