This is an attempt to forecast the yield on treasury notes based on technical analysis. Clearly this is an incomplete analysis as fundamentals will also impact heavily. So let us consider the following a base case. First, there are trends in the yield. I would not call it cycles because they have different duration. Those thends tend to last a longer time, more than six months. I use the average trend duration to make a forecast of the bottom. Second, Fibonacci is used to make a price projection. 38% retracement would mean going down to 2.5% (from 2.8% today). 62% retracement is 2.0%. The fall in yield will not be smooth and will have ups and downs (indicated by an ABC pattern from Elliott. but it could equally well be an 12345).
Forecast: In July 2019 the yield will have fallen substantially. A good benchmark is 2.3%.
The analysis is incomplete because it does not take explicit Fed action into account. A 10 year yield of 2.5% would invert the yield curve even without any further increase in the short term rate by the Fed.
Forecast: In July 2019 the yield will have fallen substantially. A good benchmark is 2.3%.
The analysis is incomplete because it does not take explicit Fed action into account. A 10 year yield of 2.5% would invert the yield curve even without any further increase in the short term rate by the Fed.