10-Yr Treasury Note, Follows Major Market Movements
Something I noticed today while look at the 10-yr bond in general (reflecting loan rates).
If you didn't already know, the price of the 10-yr bond directly affect any and all loan rates available.
Mostly of course affecting housing loans.
That's another point aside, but it does look like the price of a mortgage will be expensive over the summer.
Anyway, what I also uncovered while looking at this is how well the peaks in the 10-yr bond correlate to the major market changes for the US.
Take a look at this Wiki link for time frame references - en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
Most every major direction change (and peak) is associated with a market event since the 1980s to today.
I have highlighted those peaks on both price and RSI with vertical lines and bubbles respectively.
It's also worth noting that the burst before the 2008-2009 housing bubble crash was preceded by a rising wedge...which finished out its pattern as you would have expected. (spoiler: rising wedges end in price trend correction - downward price movement).
Looking forward to the end of 2013 and the beginning of 2014, we have another peak.
This one is not very close to the price trend line BUT shows an obvious peak in the RSI chart.
Judging from previous events like this, I assume the market will not react graciously?
Do I know? Of course not. It's just a guess.
More important than that is the new pattern being formed (Symmetrical Triangle) from the 2011 to 2016-17 time frame.
This could be a continuation pattern OR a reversal pattern (sym triangle vs. pennant).
Can't be sure until we see the pattern finish itself out to the end, however, I can take a pretty strong guess at what lending rates will look like for the next 2-3 years.
Lending rate guess:
2015 (Summer): rates will peak by September then start to fall
2016 (Spring): rates will fall to its low (on the trend line) then start to rise (March-ish)
2016 (Summer): rates will peak by June/July
2016 (Fall): ???
For rates past Fall 2016 I'm not sure what may happen.
I do not have a viewpoint past that time frame other than to "wait and see".
My guess is that this pattern is going to be a reversal but it still has a long way to go to break through the long term price trend line.
If you didn't already know, the price of the 10-yr bond directly affect any and all loan rates available.
Mostly of course affecting housing loans.
That's another point aside, but it does look like the price of a mortgage will be expensive over the summer.
Anyway, what I also uncovered while looking at this is how well the peaks in the 10-yr bond correlate to the major market changes for the US.
Take a look at this Wiki link for time frame references - en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
Most every major direction change (and peak) is associated with a market event since the 1980s to today.
I have highlighted those peaks on both price and RSI with vertical lines and bubbles respectively.
It's also worth noting that the burst before the 2008-2009 housing bubble crash was preceded by a rising wedge...which finished out its pattern as you would have expected. (spoiler: rising wedges end in price trend correction - downward price movement).
Looking forward to the end of 2013 and the beginning of 2014, we have another peak.
This one is not very close to the price trend line BUT shows an obvious peak in the RSI chart.
Judging from previous events like this, I assume the market will not react graciously?
Do I know? Of course not. It's just a guess.
More important than that is the new pattern being formed (Symmetrical Triangle) from the 2011 to 2016-17 time frame.
This could be a continuation pattern OR a reversal pattern (sym triangle vs. pennant).
Can't be sure until we see the pattern finish itself out to the end, however, I can take a pretty strong guess at what lending rates will look like for the next 2-3 years.
Lending rate guess:
2015 (Summer): rates will peak by September then start to fall
2016 (Spring): rates will fall to its low (on the trend line) then start to rise (March-ish)
2016 (Summer): rates will peak by June/July
2016 (Fall): ???
For rates past Fall 2016 I'm not sure what may happen.
I do not have a viewpoint past that time frame other than to "wait and see".
My guess is that this pattern is going to be a reversal but it still has a long way to go to break through the long term price trend line.
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