Near term U.S. 10-Year note yield outlook:
In the Mar 16th email and the market near its recent highs at 2.00% (both a 50% retracement from the June 2015 high at 2.50% and the broken neckline of the year long head and shoulders pattern) , said it was an "ideal" to form a more important top and the market has indeed turned lower since. Note that the whole upmove from the Feb 11th spike low at 1.53% is seen as a correction (wave 4 in the decline from Nov 9th high at 2.38%) and with eventual declines below that 1.53% after (within wave 5). Additionally, technicals are turning over (near new sell signal on the daily macd for example), the market is finally breaking below that bullish trendline from the Feb low and the S&P 500 may be approaching an important peak, with all supporting the view of top in the US 10 year yield. Nearby support is seen at 1.75/77%. Bottom line: potentially important top at the recent 2.00% high and with eventual declines below that Feb 11th spike low at 1.53% after.
Strategy/position:
Still short from the Mar 3rd resell at 1.83%, and for now would stop on a close .02 above that bearish trendline from Dec 30th.
Long term outlook:
As discussed above, declines below that Feb 11th low at 1.53% are favored and fits the very long held, long term view of an extended period of wide, ranging lower (years and good sized, countertrend bounces) as the market continues to form that huge falling wedge since 2003. These patterns break down into 5 legs and continues to target eventual declines below that June 2012 low at 1.38%. However, there is some risk for only limited lows below 1.53% and a more extended period of ranging (months), before those new lows are finally seen (see in red on weekly chart/2nd chart below). Key resistance remains at the ceiling of the huge wedge (currently just above that June 2015 high at 2.50%) as a break/close clearly above would argue that a more major bottom (years) is finally in place. Bottom line : still in large falling wedge since 2003 with long held view of declines below that June 2012 low at 1.38% still favored (some risk for a more extended period of ranging first).
Strategy/position:
Switched the longer term bias to the bearish side way back on Dec 17th at 2.09% for eventual declines below that June 2012 low at 1.38%. But with some risk for a more extended period of ranging first, will be quick to reassess on declines below that Feb low at 1.53%.
Current:
Nearer term : short March 3rd at 1.83% for at least temp lows below that Feb bottom at 1.53%.
Last : short Nov 12 at 2.31%, took profit Mar 1 above t-line from Dec (then 1.75%, closed 1.83%).
Longer term: bear bias Dec 17th at 2.09% for eventual new lows below 1.38%.
Last : bullish bias Dec 5th at 2.30%, neutral Dec 16th at 2.09%.
