Day Hagan Tech Talk: Death, Taxes, and Interest Rate Volatility
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Summary
The price trend of the “Technology-weighted” S&P 500 continues higher (Figure 3). Simultaneously, several breadth measures within the Technology sector have deteriorated, and I have already noted and likely over-discussed the internal deterioration beneath the broader domestic equity market. Focusing on one of the givens in life, the interest rate market and specifically the 2-year and 10-year U.S. Treasury Yield have experienced much recent volatility (Figures 1 and 2).
Respecting the Shorter-Term Trend
I’ve extensively documented my feelings about the move up above multi-decade downtrend lines in 2022 by many areas of the domestic interest rate market. If interested, please reach out for some charts. Within that context, let’s focus on some near-term trends that have developed within the domestic interest rate market.
Figure 1: 2-Year U.S. Treasury Yield w/Falling 21-day MA. | For an initial downside objective, I think 4.50% to 4.40%, for starters—green support lines. Will this help equities?
Figure 2: 10-Year U.S. Treasury Yield and 20+ Year Treasury Bond ETF (weekly data). | From a purely trend perspective, I like the pattern developing in the lower frame.
Figure 3: S&P 500 – 1-year, daily data. | The green uptrend line helps identify a support level above the late-May price low of 5191 (support), yet below the very short-term support level depicted by the rising 13-day moving average.
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Art Huprich, CMT®
Chief Market Technician
Day Hagan Asset Management
—Written 6.17.2024. Chart source: Stockcharts.com unless otherwise noted.
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