The 30 year Treasury yield is down from the recent high near 5%. A logical place for a bounce is at the 1×2 angle off the December low – near 4%.
The ten year Treasury yield is in a similar position. The 1×2 angle is between 3.4 and 3.5%.
Yields dropped significantly from 2007 to 2008. The current bounce is above the 1×1 angle which indicates that yields should move higher over the next several months. This outlook would change if yields break below the 1×1 angle.
The final leg of the drop in yield in 2008 was very steep in slope. The time cycle shows this current retrace has taken three times the duration of the leg down. Yield is below the 2008 high after three time cycles. This chart points to the opposite future outcome as a pattern like this should resolve to the downside.
When the charts of two time frames conflict in expected outcome, it is not advisable to risk money. Let the market sort out where it is going and wait for all charts to point in the same direction. That is the easy way to make money.
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