The Level 3 (Medium Term) View on the Ten Year Bond Yield

Today continues the series of posts on the ten year bond yield. The first two charts in the series were the FoxPulse5 and FoxPulse4. Those views (long and medium-long) were both bullish but each showed that a downward moving (in terms of yields) pulse was underway.

The FoxPulse3 (Medium term view) chart is shown today with the analysis beginning where the FoxPulse4 Y pulse began on May 1, 2013. 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 mid-May the RSI (top pane) broke above the resistance zone reserved for bear markets. Then, after hitting the resistance zone reserved for bull markets in late June, a long series of lower RSI readings ensued while 10 year yields continued to move higher. This long period of bearish divergence was culminated when the currently unfolding Z pulse broke the Beta – X trendline a week ago today.

About to confirm this bearish development is the RSI, which is about to break definitively below the support zone reserved for bull markets.

The price pulse model says that this chart will remain bearish unless the Y pulse peak (29.84) is broken.

I will look at the FoxPulse2 chart next. To recap, Levels 5 and 4 are bullish and level 3 bearish.

The Level 4 (Medium-Long) View on the 10 Year Yield

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.

The Level 5 (Long Term) View On The 10 Year Yield

Today I will start a series of posts on the ten year bond yield. The first chart will be the long term view provided by the FoxPulse5.

The chart shows the downtrend in yield that has been unfolding over the past number of years – some would say since 1981 actually. This posting is not to argue that that downtrend is over, but to point out that the FoxPulse did turn bullish on its long term basis (level 5) a year ago (green arrow). This signal occurred when the Delta – Y trendline was broken and remains in effect today.

Note the RSI (top pane) at the most recent Z pulse bottom. There was a large bullish divergence between this indicator and price. After the first bounce from that low the RSI moved to a value of 51. It then declined to 42 (black arrow); holding the support zone found in bull markets. We then had the bullish break of the Delta – Y trendline.

Today the Alpha pulse up from that low is over and so we are in a downward Beta pulse. I will look at the FoxPulse 4 chart next.

Weekly Chart Remains Bearish

This chart remains bearish. Here was the three step process that culminated in a bearish rating:

1) A TD Sequential countdown bar #13 on August 2,

2) The cash S&P500 had bearish divergence confirmed between price and the RSI (top pane) on August 9, and

3) A price flip occurred on August 16.

The associated “stop loss” (or risk) level is at 1737.48 (horizontal cyan line).

On this chart, the next bearish development would be to confirm that the August 2 high also marked the end of the green level Y pulse (and hence wave 5 in the trending impulse pattern from the November 2012 low). Currently it would take a move below the June 2013 low to get that confirmation. However; an “early warning” signal for this event would be a close below the Beta-X trendline shown in blue.

Finally, note that the June 2013 low must still be broken in order to show the TD D-Wave Triple Three count (presented in the recent series of postings on waves) as complete. Please note that the wave count shown on the chart is not that D-Wave count but instead one based heavily on my price pulse work. I use the D-Wave count in a corroborating role.

Weekly Chart Turns Bearish

This chart is now bearish. After recording a TD Sequential countdown bar #13 on August 2, the cash S&P500 had bearish divergence between price and the RSI (shown in the last weekly chart posting). With the stage set, we had a price flip to trigger a “sell” signal this week. The associated “stop loss” (or risk) level is 1737.48 (horizontal cyan line).

I believe we have now completed an Alpha pulse (at the blue color level). On this chart, an even more bearish development would be the confirmation that the August 2 high also marked the green level Y pulse (and hence wave 5 in the trending impulse pattern from the November 2012 low). Currently it would take a move below the June 2013 low to get that confirmation. An “early warning” signal for this event would be a close below the Beta-X trendline shown in blue.

Finally, note that the June 2013 low must still be broken in order to show the TD D-Wave Triple Three count (presented in the recent series of wave postings) as complete. Please note that the wave count shown on the chart is not that D-Wave count but instead one based heavily on my price pulse work. I use the D-Wave count in a corroborating role.

With both the daily chart and weekly charts bearish, one should entertain a sharply reduced exposure to equities.

Weekly Chart Just Needs a Price Flip

The technicals associated with this chart continue to be supportive of potential price exhaustion since we now have an actual bearish divergence between price and the RSI (top pane). This is particularly of interest since we have a TD Sequential countdown bar #13 in place. Now I am waiting for a price flip to trigger a “sell” signal. In this case a close next week below 1692.09 will do the trick. To be balanced we should also point out the associated “stop loss” level of 1737.48.

The Beta-X trendline is shown in blue. This is used as an aggressive “sell” trigger in the price pulse investing scheme. I believe we are very close to completing an Alpha pulse (at the blue color level). If so, the conservative “sell” signal would be for a close below the previous Z pulse low. This is also the low that must be broken for TD D-Wave to show the Triple Three count presented in the recent series of postings as complete. Please note that the count shown on the chart is not that D-Wave count but instead is based heavily on my price pulse work.

With the daily chart now bearish, the weekly close to flipping that way, and potential exhaustion showing up at the monthly levels one should be ready to move even further to the sidelines as far as the cash S&P500 goes.