Are New Lows Ahead for Bond Yields

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The 10-Year US Treasury Yield (TNX) closed at 2.50% on Friday. The 52 week low for yields sits at 2.35%, which traded on March 27.

I focus on a price based techincal trading process and moving averages, and not perceived fundamentals, so my post will be limited to my technical perspective.

As the chart below shows my primary trend filter, the 40 week simple moving average has rolled over, as has the 10 week SMA, which is indicative of a primary downtrend. Yields have also recently made 3 lower highs, 2.79, 2.75 and 2.61. This is also indicative of a primary downtrend, and as a result, for my time frame, the path of least resistance appears to be lower. Yields recently rallied to their declining 50 day MA, and registered overbought on my screen at 2.61. There is a lot of price congestion from 2017 in the 2.50 to 2.15 range, which could provide some price support if the trend continues down. The big target on my screen intermediate term is 2.00. If that target is hit, I will assess the position  at that time.

I am positioned very long TLT in the swing account and trend account and also TMF as well in the trend account. Different entry points, stop points and position sizing. TLT recently registered oversold into it's rising 50 day MA, which was my entry point at 122.52. As always, I am not making any prediction of what will happen, but have only positioned myself based on the my technical trend following program.

A close over 2.65% in yields would neutralize the short term downtrend and over 2.75% would neutralize the intermediate trend. Under 120 in TLT would have me out of most of the position. As always, I know exactly where my risk management exits are if the trade moves against me.