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The charts, graphs and comments in my Trading Blog represent my technical analysis and observations of a variety of world markets...
* Major World Market Indices * Futures Markets * U.S. Sectors and ETFs * Commodities * U.S. Bonds * Forex

N.B.
* The content in my articles is time-sensitive. Each one shows the date and time (New York ET) that I publish them. By the time you read them, market conditions may be quite different than that which is described in my posts, and upon which my analyses are based at that time.
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DISCLAIMER: All the information contained within my posts are my opinions only and none of it may be construed as financial or trading advice...

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Thursday, February 27, 2020

US10YT Drops To A New Record 60-Year Low As US Equity Markets Correct By 10%

I last wrote about US 10-Year Treasury Yields in my post of August 16, 2019, which warned of potential upcoming weakness in the equity market. It was trading at 1.556.

Since then, it rose to a high of 1.952 in December, reversed course sharply in January, and has plunged to an all-time new low of 1.254 as of 2:15 pm ET today (Thursday), as shown on the following Monthly chart, as equity markets reached a 10% correction level this morning.

The big question is, is this capitulation or is it a warning of further equity weakness?

I've shown the Rate-of-Change (ROC) and Average True Range (ATR) indicators in histogram format and with an input value of one period to highlight extreme movements in both directions.

Inasmuch as neither one is at an extreme level yet, we may see a further drop in the US10YT, as well as equities. If it fails to recapture and hold above 1.50 sometime soon, equities are in for more volatility in both directions.


P.S. 

Here's how the US Major Averages closed today...



It will be interesting to see how China trades tonight...