Yields Revisit a Key Level
The recent rise in Treasury yields has caused some worry among stock investors. However there could be reason to think the move is ending.
Today’s chart of the 10-year Treasury note yield uses two-week candles to provide a longer-term view. It highlights the 4.324 percent level, which was a peak back in June 2008 that became important again in October 2022. TNX paused at the same spot in August 2023 before surging toward 5 percent.
There was further churning at 4.324 percent between February and June. Also notice how yields accelerated lower in July after breaking the level. All those points may confirm its importance -- and make traders more attentive to it being tested this week. Will a reversal here confirm lower yields are coming?
Next, March 2024 saw a lower high than October 2023. If yields decline from here that would represent another lower high.
Finally, you have the March 2023 low of 3.25 percent. At that time, the Federal Reserve was still raising interest rates. Now, with an easing cycle underway, some investors may see a possibility of yields filling at least some of that space.
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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 https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
Today’s chart of the 10-year Treasury note yield uses two-week candles to provide a longer-term view. It highlights the 4.324 percent level, which was a peak back in June 2008 that became important again in October 2022. TNX paused at the same spot in August 2023 before surging toward 5 percent.
There was further churning at 4.324 percent between February and June. Also notice how yields accelerated lower in July after breaking the level. All those points may confirm its importance -- and make traders more attentive to it being tested this week. Will a reversal here confirm lower yields are coming?
Next, March 2024 saw a lower high than October 2023. If yields decline from here that would represent another lower high.
Finally, you have the March 2023 low of 3.25 percent. At that time, the Federal Reserve was still raising interest rates. Now, with an easing cycle underway, some investors may see a possibility of yields filling at least some of that space.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. If you're born to trade, we could be for you. 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 https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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