Ten Year Treasury Technical Trendlines
Friday's very disappointing non-farm payroll number may have had zero impact on stocks, which after opening deep in the red, following the latest Fed-induced all day zero volume ramp, closed at the all time highs (because when you can't BTFD you BTFATH), but it sure worked miracles on the 10 Year to keep it from tumbling below the critical 2.75% level (in no small part aided by the rampant momentum ignition manipulation in the 10 Year moments before the BLS released its data). Yet does Friday's move change anything in the Ten-Year Trendline? According to Bank of America technical strategist MacNeil Curry, not at all.
While Friday’s NFP release held true to its reputation as a volatility inducing event, it failed to alter the technical landscape across asset classes. US Treasuries remain in a bear trend, indeed US 10s yr yields even managed to hold to their 2wk pattern of higher lows. US equities maintained their bull trend, with the S&P500 and NASDAQ 100s going out at new all time highs. While the US Dollar Index failed at pivotal 82.41 resistance, its larger basing argument remains intact (indeed, despite the Friday Bullish Engulfing Candle, £/$ remains one of our preferred ways to express $ strength). Finally Friday’s volatility failed to damage the gold basing argument nor the topping oil arguments.
Chart of the week: The Treasury Bear trend remains intact
Despite the Friday rally, no damage was done to the larger bear trend. Indeed the pattern of higher highs and lows from Jul-17 remains intact. Further yield weakness should be limited to 2.555% area before the larger bear trend resumes for 2.756% ahead of 2.85%/2.95%.
When that happens, watch out.
As for the S&P500, technicals say upper channel, or Bernanke bust.
S&P500 makes new all time closing highs. There is more likely to come.
With the push to new closing highs, the long term bull trend has been reaffirmed. Against 1674/71 we stay bullish for1730, potentially 1780.
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