Going sharply against a bearish consensus, Rick’s Picks has been enthusiastic about Treasury paper since late 2018. Going back a year or more, few except hardcore deflationists saw yields on the Ten-Year Note crashing 2%, especially with GDP hitting 3%. Today’s powerful rally pushed them down to 1.87%, precisely matching the forecast sent out to subscribers on July 2, a month ago. So what next? If rates don’t turn from right here, expect them to continue down to at least 1.81% over the near term. That is equal to a ‘midpoint Hidden Pivot’ support shown as a red line in the chart. A bounce from that number should be presumed not only likely but tradeable. However, if $TNX were to close below 1.81% for two consecutive weeks, or trade more than 50 basis points below it at any time, a 1.47% target would be in play. _______ UPDATE (Aug 15, 9:26 p.m. ET): Yields have rebounded after bottoming 0.02 points below the 1.47% target we’ve used for weeks as a minimum downside objective. It has taken TNX four months to get there, so the bounce should take at least a week or two to play out, assuming it’s just a bounce. However, if this vehicle relapses and heads lower within the next few days, breaching the low, that would imply rates are headed significantly lower.
TNX.X – 10-Year Note Rate (Last:1.52%)