Today continues the series of posts on the ten year bond yield. The first chart in the series was the FoxPulse5. That long term view was bullish but showed that a downward moving (in terms of yields) Beta pulse was underway.
The FoxPulse4 chart is shown today with the analysis beginning where the FoxPulse Alpha pulse began in July 2012. The pulse structure shows a trending Alpha – Beta –Delta – X – Y formation that just ended at the beginning of this month. Note that going into July 2012 the RSI (top pane) was reading less than 38 and thus indicating a bear market. Then, as shown in the last post, the RSI bounced and was able to hold the bull market support zone (see arrow in late August 2012). It then exceeded the zone that would typically contain continuing bear markets in June 2013 (arrow on chart). Now, as our Y pulse has topped, the RSI is showing bearish divergence with the price action.
The RSI action confirms that a downward Z pulse is underway on this medium-long view (level 4). However; the price pulse model says that this is only a correction within a larger bull market unless the Beta – X trendline is broken (shown in orange). But that trendline is well below the market. How deep of a correction is at hand? Should a bull ride it out? Perhaps the lower level FoxPulses will help answer those questions.
I will look at the FoxPulse3 chart next.
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