Treasury 10-Year at 2.98% Is Bear Signal, FTN Says: Technical Analysis

A close for 10-year Treasury note yields between 2.98 percent and 3.02 percent would signal the yield may be near a bottom, according to FTN Financial.

The 10-year yield tumbled to 3.02 percent June 28 from 3.11 percent June 25. In a telephone interview today, Jim Vogel, head of agency-debt research at FTN in Memphis, Tennessee, said reaching 3.02 percent “would be an indication that you would fill in the gap that was created on the 28th.”

Conversely, if yields move lower, Vogel said the market could signal higher prices.

“Bullish momentum resumes with a solid close below 2.93 percent,” Vogel wrote today in a note to clients. “Bond traders continue to think bullish range as long as the S&P 500 remains so far below 1050.”

Ten-year yields fell 2 basis points to 2.96 percent at 1:04 p.m. in New York, according to BGCantor Market Data. The 3.5 percent security due May 2020 rose 6/32, or $1.88 per $1,000 face amount, to 104 19/32. The yield declined to 2.879 percent on July 1, the least since April 2009.

“We’ve had higher closes on the yields,” Vogel said. “To keep that pattern going you need to close somewhere around 2.97 percent or 2.98 percent, Vogel said. For now ‘‘we’re kind of stuck,’’ he said.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net

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