Watch the US 10Y Yield chart as it approaches MAJOR resistance

22. März 2022

I am taking a closer look at a long-term chart of the US 10Y yield today, I consider this to be a very important chart. Why? Firstly, Government debt continued to sell-off yesterday, with bond bears spurred on by more hawkish remarks from Fed Chair Powell, and secondly, I prefer to look at yield charts as I consider that the data is clearer and not disrupted or distorted by the ‘rollovers’ of the bond futures market.

Ok I have done something a little strange on this chart, I can clearly see the down trend in evidence going back nearly 40-years and yet when I try to draw a trendline, I can only get a resistance line (a line that joins only 2 points and not 3). Why is this important? Because I want to know exactly at what point this nearly 40-year bull market capitulates - so what have I done? I have instead connected the lows from 1993 (there are at least 4 major lows) and drawn a parallel off this support line. Our long-term resistance line is at 2.52 BUT our parallel line is higher at 2.63 AND we have the 200-month ma in close proximity at 2.68. Conclusion – the MAJOR resistance lies at 2.63/68 and these are the KEY levels to watch.

I have been watching these levels for at least the past 2-years, because not only will this will be the final death knell of the bond market, but because we also suspect at this level the stock market could also capitulate.


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