10yy 'neckline' SUPP 1.67/705% then 1.775/82% and resistance @ 1.62/61%
Technical levels to watch 10yy for those trying to play along and follow the bouncing ball. These from a Swiss shop that had a ‘Beantown’ affiliation,
…Chart of the Day: … and from a shorter-term perspective, US 10yr Bond Yields have surged higher since the start of the year, seemingly driven by renewed confidence in the economic outlook as the evidence grows that the Omicron variant is less severe. Since December 29th , when yields started accelerating higher, the move has been predominately been driven by Real Yields, after the recent move higher in inflation expectations stalled, as well as by curve steepening as terminal rate pricing finally rises. All this leaves 10yr US Bond Yields right in the midst of a key medium-term support zone at 1.67/705%, which is the “neckline” to a 3-year basing structure and the October/November range highs. Our bias is for a direct move above here to finally complete the aforementioned base and then for a quick move to the next major support zone between 1.775% and 1.82%. Short-term intraday resistance moves to 1.62/61%.
When flipping through the report you’ll find they are just now turning tactically BEARISH for move up TO 1.82 and while thats instructive, what may be as / more important is RISK LEVELS noted with daily visual of yields,
… Short-term Strategy: We turn tactically bearish, expecting a move to support at 1.82%, with short-term resistance at 1.61%, below which we would turn tactically neutral.
With short-term resistance in mind — and for a shorter-term DAILY view of 30yy (also NOW turning tactically BEARISH?),
US 30yr Bond Yields surged higher over the holiday season and are now testing above the important downtrend from the 2021 high.
Outlook: 30yr US Bond Yields surged higher over the holiday period after breaking above the 55-day average, with the market now testing above much more important medium-term support at 2.05/055%, which is the 200-day average and the key downtrend from the 2021 high. Above here would mark an important breakout in our view to suggest further short-term weakness, with the next levels seen at 2.17/175%, which is the broader range top since late June. Our base case is that this level will cap the market to keep it trapped in the broad mean-reverting environment. However, we note that a breakout above here would be a highly significant breakout and would suggest with a high degree of confidence that the market is likely to move into a new higher level range, which is likely to be defined by 2.42% on the topside and the 2.17% breakout point on the downside.
Key near-term resistance is seen at 2.055/04%, which should now hold, particularly into the close, to maintain the direct upward pressure on yields. Below would confirm the market remains in the broad lower-level range.
Short-term Strategy: We turn tactically bearish, looking for a move to support at 2.17%, where we would turn tactically neutral. Resistance moves to 2.045%, below which we would also turn tactically neutral.
While this outfit may be good and right generally speaking, it would seem to me that selling NOW, ahead of NFP Friday, and with all the FOMC minutes cards laid on the table, I can’t help but wonder how much gas left in the bears tank …
As always, the risk levels are worth noting — 1.345% 5s, 1.61% 10s, 2.043% resistance, then, should ALL be firmly planted on front page of the ‘notebook’ (alerts set, etc..) as they will bring others in to the market IF they follow this art form and are forced, then, to run for cover. HERE is link thru for ALL the details …