0-year Treasury yields have been the ‘talk of the town’ lately. Many market commentators consider 10-year rates the linchpin for continued equity gains and scapegoat for lack thereof.
Here is the near-term outlook for 10-year Treasury yields and 30-year Treasury Bonds as published in Sunday’s Profit Radar Report (charts have not been updated, but price has moved in the expected direction).
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30-year Treasury Bonds (TLT) Outlook
The daily chart (end of day prices only) pegs 30-year Treasury Futures at a general support zone (extending slightly above and below the green trend line) and just below trend channel support. There is a bullish RSI-35 divergence with RSI-2 nearly over-sold.
The wave structure since the March 2020 high is not without dispute, but the persistence of the latest decline suggests this is a wave 3 (or C) decline. A bounce (either wave 4 or something more sustainable) could start from around the current support range.
The structure for the iShares 20+ Year Treasury Bond ETF (TLT) looks similar.
A detailed long-term outlook for 30 year Treasury bonds was published in the March 21, 2021 Profit Radar Report.
10-year Treasury Yield Index (TNX) Outlook
TNX (10-yr Treasury Yield Index) closed right at double resistance last week. RSI-2 is nearly over-bought and RSI-35 shows a bearish divergence. Up side momentum has been strong and betting on a reversal takes perfect timing, but the odds for a (temporary) reversal (perhaps wave 4) are higher than at any other point over the past few months.
Below is a list of ETFs linked to 10-year Treasury bonds. Keep in mind that there is an inverse relationship between bond prices and yields. Anyone betting on lower 10-year yields would want to be long 10-year Treasuries while anyone betting on a continued rise in yields would want to own an inverse 10-year Treasury ETF (like TBX, PST, TYO).
iShares 7-10 Year Treasury Bond ETF (IEF)
ProShares Short 7-10 Year Treasury ETF (TBX)
ProShares Ultra 7-10 Year Treasury ETF (UST)
UltraShort Barclays 7-10 Year Treasury ETF (PST
Direxion Daily 7-10 Year Treasury Bull 3X (TYD)
Direxion Daily 7-10 Year Treasury Bear 3X (TYO)
Continuous updates are available via the Profit Radar Report.
Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates.