US10YT Drops To A New Low

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I last wrote about US 10-Year Treasury Yields in my post of August 16, 2019, which warned of potential upcoming weakness in the equity market. It was trading at 1.556.

Since then, it rose to a high of 1.952 in December, reversed course sharply in January, and has plunged to an all-time new low of 1.254 as of 2:15 pm ET today (Thursday), as shown on the following Monthly chart, as equity markets reached a 10% correction level this morning.

The big question is, is this capitulation or is it a warning of further equity weakness?

I’ve shown the Rate-of-Change (ROC) and Average True Range (ATR) indicators in histogram format and with an input value of one period to highlight extreme movements in both directions.

Inasmuch as neither one is at an extreme level yet, we may see a further drop in the US10YT, as well as equities. If it fails to recapture and hold above 1.50 sometime soon, equities are in for more volatility in both directions.

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