Higher Yields on Bonds, Gold and Crude Oil
The rise in the yields for the 10-year Treasury note and the 30-year Treasury bond peaked at 2.936% and 3.94% respectively on Aug. 22. The rise in yields has become overdone on their weekly chart with the 200-week simple moving averages at 2.540% on the 10-Year and 3.648% on the 30-Year.
My call for September is that these yields will form trading ranges influenced by new monthly pivots at 2.725% on the 10-year and 3.738% on the 30-year. The 10-year yield ended August above its pivot, while the 30-year ended the month below its pivot. The rise in yields on Tuesday has the 30-year yield above this pivot this morning.
This configuration normally results in reversal-oriented trading, which would not be surprising given the tendency to see a 'flight to quality' during the Syrian uncertainties and the expectation that the Federal Reserve will taper its QE3 and QE4 bond buying programs. My annual pivots have become risky levels at 2.476% and 3.014% respectively.Continue to trade the bond market just like a stock using iShares 20+ Year Treasury Bond (TLT) ($104.22). The Treasury ETF is below its 50-day simple moving average 106.84 with the 200-day SMA a strong resistance at $116.04. The weekly chart shows an oversold condition with the 200-week SMA at $107.68. The Aug. 21 low is $102.11 with a monthly pivot at $105.75 and annual risky levels at $116.26 and $120.42. My semiannual value level lags at $92.32.
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