Treasury Yields Decline to New Lows

| September 2, 2011

The 10-year Treasury note yield closed sharply lower today, moving down to a new low for the downtrend from February. Technical indicators have weakened again and they are now moderately bearish overall on the daily chart, favoring a continuation of the decline.

The sharp move lower today confirms that the latest short-term cycle high (STCH) formed on August 29 and reconfirms the bearish cycle translation that has persisted for several months.

The sharp decline for the week has cleared the intermediate-term cycle low setup that occurred last week, confirming that the corrective phase of the intermediate-term cycle from July is still in progress.

However, the decline remains extremely oversold and it will almost certainly be followed by a violent technical reaction sometime during the next several weeks.

Category: Commentary, Market Update

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