Yet
another important index worth watching in the days ahead is the 10-year
Treasury Yield Index (TNX).
In
the Sept. 23 report I wrote, “Let’s watch for potential support in the coming
days as TNX approaches the 25.50-26.00 area.
The technically important 90-day moving average intersects this area and
looks like it could provide support should TNX drop to this area. A lateral trading band with parameters at
roughly the 25.50-26.00 area on the low end and 29.50-30.00 on the high end is
a strong possibility in the coming weeks.”
As you can see in the [above] chart, TNX has established support above the 90-day MA in the last two weeks and is threatening to rally from this support. A rally in the Treasury yield would put additional downside pressure on equities, so let’s continue to monitor TNX. [Excerpted from the Oct. 7 issue of Momentum Strategies Report]
