Have Treasury Yields Peaked?
Soaring inflation and bond yields have hammered sentiment all year. But now there could be signs of yields peaking.
A few patterns appear on this chart of the 10-year Treasury yield. First is the October 2018 high of 3.248 percent. TNX jumped above that level for six sessions before rolling over. It tried it again on June 28, but failed. That lower high may confirm long-term resistance remains in effect.
Second is the rising trendline along the lows of March and May. The yield closed below that pattern yesterday. Has the trend broken?
Third, MACD made a lower high in mid-June as TNX made a higher high. That kind of divergence is a potential reversal pattern.
We’ve also seen widening losses in most non-oil commodities: copper, wheat, iron ore -- even natural gas. While inflation remains an issue, those declines could help lower yields.
Finally, it’s noteworthy that the
30-year Treasury yield never even broke its 2018 high. That may also suggest that long-term inflation worries haven’t gotten completely out of control.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
A few patterns appear on this chart of the 10-year Treasury yield. First is the October 2018 high of 3.248 percent. TNX jumped above that level for six sessions before rolling over. It tried it again on June 28, but failed. That lower high may confirm long-term resistance remains in effect.
Second is the rising trendline along the lows of March and May. The yield closed below that pattern yesterday. Has the trend broken?
Third, MACD made a lower high in mid-June as TNX made a higher high. That kind of divergence is a potential reversal pattern.
We’ve also seen widening losses in most non-oil commodities: copper, wheat, iron ore -- even natural gas. While inflation remains an issue, those declines could help lower yields.
Finally, it’s noteworthy that the
30-year Treasury yield never even broke its 2018 high. That may also suggest that long-term inflation worries haven’t gotten completely out of control.TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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