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 StockCharts.com specializing in intermarket and commodities analysis. Based in Calgary, he 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 Market Technicians Association (MTA) and the International Federation of Technical Analysts (IFTA).

Greg is also the co-author of Stock Charts for Dummies (Wiley, 2018). Greg joined StockCharts.com in 2012 and has be instrumental in helping launch a variety of new blogs and other commentary platforms. Presently, Greg contributes market analysis commentary to The Canadian Technician, Commodities Countdown and Don't Ignore This Chart blogs. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus