Interest rates have been a major driver of stock prices since early 2022, and today something noteworthy happened with the key 10-year Treasury note.
The first pattern on this yield chart is the 50-day simple moving average (SMA) marked in red. On Wednesday, it slid below the 200-day SMA (in green) for the first time since November 2021. Commonly known as a “death cross,” this relationship is often viewed as an indicator of long-term direction.
Next, you have two falling trendlines. TNX climbed after breaking the first trendline in February. This month, however, it’s stayed below a similar trendline.
Third, a 50 percent retracement of the drop in March is roughly at 3.61. Notice how the yield has remained below that level, which potentially confirms the downward movement.
Traders could next eye roughly 3.25. It was the low in April and an old high from October 2018.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
The first pattern on this yield chart is the 50-day simple moving average (SMA) marked in red. On Wednesday, it slid below the 200-day SMA (in green) for the first time since November 2021. Commonly known as a “death cross,” this relationship is often viewed as an indicator of long-term direction.
Next, you have two falling trendlines. TNX climbed after breaking the first trendline in February. This month, however, it’s stayed below a similar trendline.
Third, a 50 percent retracement of the drop in March is roughly at 3.61. Notice how the yield has remained below that level, which potentially confirms the downward movement.
Traders could next eye roughly 3.25. It was the low in April and an old high from October 2018.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: www.tradestation.com/important-information.
