Daily Archives: January 30, 2017

10-Year Yield Transitioning Out of Multi-Year Bear Market

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My intermediate and longer term technical set-up work on 10-year US Treasury yield argues that benchmark yield is in transition from a 35-year bear Market (dominant downtrend) into a multi-year bull market (dominant uptrend).

From 1981, when 10-year yield peaked at 15.84% amid concerns about rampant, uncontainable inflation and stagnant growth (“stagflation”) precipitated initially by the 1973 OPEC oil embargo, benchmark yield steadily and relentlessly declined to a post-financial-crisis 2016 low at 1.32% (see Charts 1 and 2).

From a technical perspective, I can make the case that all of the action in yield from mid-2011 into early 2017—a 5-1/2 year period– represents a major base formation at the conclusion of a generational yield bear market (see shaded area on Chart 1). That said, to confirm the end of the 5-1/2 year transition from bear to bull market, yield must climb and sustain above significant resistance lodged between 2.75% and 3.30%. Yield currently is circling 2.50%.

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New Digital Digs

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The Google problem I was trying to resolve on Friday was trying to renew my primary domain at www.channelsandpatterns.com. That attempt was unsuccessful and the domain expired on Saturday. The domain now spends a few days in digital limbo where I can still renew it if Google astonish me by sorting out the problem successfully. In the meantime I have moved the blog to www.channelsandpatterns.net which, needless to say, isn’t registered with Google. More out of optimism than any kind of faith I am giving Google this week to get their act together before moving my Disqus comments over to the new domain, so for this week comments will need to be on my twitter.

ES broke down from the bull flag channel at the open last night which opened up the downside today, and the obvious support not far below at the time of writing is the backtest of the daily middle band at 2272 (approx 2267/8 on ES). SPX daily chart:

170130 SPX Daily

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Breakout Test

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Good morning, everyone. Well, quite a weekend, wasn’t it? I’m glad I wasn’t traveling by plane. Are people really this surprised that Trump actually is doing what he said he was going to do? I guess the nation is too accustomed to politicians……….actual politicians………like ol’ Hillary and assume that campaign promises are merely for the election season and don’t really mean anything. All I can say for those who are freaked out by just a single week of this man’s tenure…..it’s going to get wayyyyyyyyyy worse.

The silver lining, of course, is that he could completely wreck the equity markets while doing so, and this morning we’re off to a bit of progress. It won’t really count, however, until and unless we break beneath the green tinted area I’ve shown below. At this point, we’re simply retracing the big breakout from last week, which the 20k-obsessed media was celebrating.

0130-es

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