Triangle on the 10-Year Before Big Events
Bond yields are converging before some big events this month.
Today’s idea studies the yield on the 10 Year Treasury note. It is arguably the most important chart in financial markets given the current focus on interest rates.
Upside in TNX has punished sentiment on various occasions, so potential downside signals could be especially noteworthy for risk appetite.
First we have a pair a converging lines. This triangle is a potential reversal pattern after a few years of steady increases.
Second is the 4.324 percent level. It was a high in June 2008 as the subprime crisis took hold. TNX peaked there in February and March before bouncing there in mid-May. Remaining above that level could potentially suggest yields haven’t peaked. Will a push below trigger more declines?
Next is 4.70 percent. That was the location of a major gap on November 2 as investors looked for inflation to ease. Yields peaked there in late April. Remaining below it may confirm that markets believe inflation is headed lower.
Finally, major catalysts that could influence TNX are marked. The European Central Bank is expected to cut rates on Thursday. U.S. non-farm payrolls are on Friday. Then the big events are next Wednesday, June 12: The consumer price index (CPI) inflation report in the morning, followed by the Federal Reserve meeting and dot plot in the afternoon.
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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 or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
Today’s idea studies the yield on the 10 Year Treasury note. It is arguably the most important chart in financial markets given the current focus on interest rates.
Upside in TNX has punished sentiment on various occasions, so potential downside signals could be especially noteworthy for risk appetite.
First we have a pair a converging lines. This triangle is a potential reversal pattern after a few years of steady increases.
Second is the 4.324 percent level. It was a high in June 2008 as the subprime crisis took hold. TNX peaked there in February and March before bouncing there in mid-May. Remaining above that level could potentially suggest yields haven’t peaked. Will a push below trigger more declines?
Next is 4.70 percent. That was the location of a major gap on November 2 as investors looked for inflation to ease. Yields peaked there in late April. Remaining below it may confirm that markets believe inflation is headed lower.
Finally, major catalysts that could influence TNX are marked. The European Central Bank is expected to cut rates on Thursday. U.S. non-farm payrolls are on Friday. Then the big events are next Wednesday, June 12: The consumer price index (CPI) inflation report in the morning, followed by the Federal Reserve meeting and dot plot in the afternoon.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
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 or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit [url =tradestation.com/DisclosureTSCompanies] TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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