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Sunday, March 05, 2017 8:55:31 AM
:) Two-Year Treasury Yield Reaches Seven-Year High, Dollar Turns Up
By John Murphy
* March 4, 2017
Chart 1 shows the 2-Year Treasury yield climbing above 1.30% on Thursday, for the first time in seven years. That shorter term yield is more sensitive to the potential for a rate hike than longer-range maturities. That suggests that fixed income traders are taking expectations for a March rate hike by the Fed more seriously. Fed fund futures Wednesday placed the odds for a March hike near 66%. That suggests that bond yields in general are probably headed higher as well. That's also giving a big boost to the U.S. dollar.
Chart 2 shows the U.S. Dollar Index ETF (UUP) climbing to the highest level in six weeks. The dollar is following the 2-Year Treasury yield higher on increased expectations for a March rate hike. Chart-wise, the UUP was due for an upturn anyway. Previous messages showed the UUP having retraced 50% of its August/January rally, which put it in a logical support point. Chart 2 also shows "gap support" formed in mid-November right after the election (see box). One final point. The numerals show that the UUP has been in a "wave four" Elliott wave correction since the start of the year. Uptrends usually have five waves. That makes the 2017 decline a correction in an ongoing uptrend. That increases the odds that a "wave five" advance is starting.
http://stockcharts.com/articles/chartwatchers/2017/03/two-year-treasury-yield-reaches-seven-year-high-dollar-turns-up.html
• DiscoverGold
Click on "In reply to", for Authors past commentaries
By John Murphy
* March 4, 2017
Chart 1 shows the 2-Year Treasury yield climbing above 1.30% on Thursday, for the first time in seven years. That shorter term yield is more sensitive to the potential for a rate hike than longer-range maturities. That suggests that fixed income traders are taking expectations for a March rate hike by the Fed more seriously. Fed fund futures Wednesday placed the odds for a March hike near 66%. That suggests that bond yields in general are probably headed higher as well. That's also giving a big boost to the U.S. dollar.
Chart 2 shows the U.S. Dollar Index ETF (UUP) climbing to the highest level in six weeks. The dollar is following the 2-Year Treasury yield higher on increased expectations for a March rate hike. Chart-wise, the UUP was due for an upturn anyway. Previous messages showed the UUP having retraced 50% of its August/January rally, which put it in a logical support point. Chart 2 also shows "gap support" formed in mid-November right after the election (see box). One final point. The numerals show that the UUP has been in a "wave four" Elliott wave correction since the start of the year. Uptrends usually have five waves. That makes the 2017 decline a correction in an ongoing uptrend. That increases the odds that a "wave five" advance is starting.
http://stockcharts.com/articles/chartwatchers/2017/03/two-year-treasury-yield-reaches-seven-year-high-dollar-turns-up.html
• DiscoverGold
Click on "In reply to", for Authors past commentaries
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
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