Hours before the Federal Open Market Committee announces its interest rate policy, like it is some big mystery, rates are at their highest levels since May.
The 10-year Treasury note sits at about 1.8%, off the July low of 1.3%, the lowest in history. However, FOMC meeting or not, the next few weeks should see this rate decline toward at least 1.5% (light green box), with a very slim chance of a new low into the 1.25% area (bright green box).
Why? How can that be forecast?
It turns out that using our eyes more and our ears less makes our objectivity increase. In financial markets, objectivity rules subjectivity.
Our ears are always subject to the opinions of others, with their vested interests influencing their "facts" and their enthusiasm influencing our common sense or objectivity.
Loud isn't always true, better or even right. In fact, loud is often wrong, so let's turn down the volume.
Our eyes are our objective windows into the market's truth, which is typically set up for those to see if the noise can be modulated. Let's see what our objective decision support engine is seeing, which has no ears to confuse it.
First, note the overbought extreme from which these weekly stochastics are being rejected. This is the sign that rates have risen too much and need at least a corrective decline.
Second, the pattern recognition algorithms within the DSE are warning that the rising pattern off the July low isn't impulsive, at least yet, and therefore the window is open for a test of one or both of the green boxes.