Are Treasury Bonds Peaking At 25-Year Resistance?
Chris Kimble | May 06, 2020 11:41AM ET
If treasury bonds aren’t on your radar, they should be. Many investors and mom and pops own treasury bonds, whether it be a retirement account or pension.
Last month, I wrote an article about the potential for a reversal on the 30-Year U.S. Treasury bond by looking at an inverted chart of the 30-Year Treasury Bond Yield.
Today, I do the same thing but with the 10-Year US Treasury Bond Yield. For one, bonds and bond yields have an inverse relationship. And two, inverting charts can offer a creative (and unbiased) way of analysing where one thinks price is headed next.
In this case, we can see that the inverted 10-Year Bond Yield appears to be putting in a long-term massive bearish “monthly” reversal. This started in March with the largest reversal in three decades at (1).
And last month followed with a “hanging man” topping candle at 25-year price resistance at (2). Note that this resistance is fortified by two converging trend lines.
Finally, momentum remains at the highest level in decades (3).
Taken together, this is a historic bearish reversal for Treasury bonds. Follow through to the downside would confirm this ominous pattern. Stay tuned.
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