10-Year US Treasury Notes Elliott Wave Theory Technical Analysis

10-Year US Treasury Notes back at February highs.

The 10-Year US Treasury Note is back at the February 2016 highs.

Click the image below for a full size chart.

10-Year US Treasury Note Daily chart

This should probably be interpreted as a Рfor the stock market Рlarge negative divergence. The S&P500 index would have to drop to around the 1875-1900 range to re-establish a close correlation. However, credit instruments and stocks are not perfectly correlated at any time, and one cannot simply expect stocks to drop automatically because of this spread caused by some sort of fear-driven decoupling which has sent investor capital back into the perceived safe haven of the 10-Year US Treasury Note. The markets are more complicated than that, and drift in and out of correlations between various instruments.

Still, this is a negative sign for the stock market, and it shouldn’t be ignored. It might signify lesser volumes / lesser capital available to defend the current levels in the US stock markets.

If you want to know more about the financial bubble, check out Surviving The Final Bubble.

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Carl Malmberg
Carl Malmberg
Technical Analyst at EWT Investing
Carl has analyzed and traded the financial markets 13+ years.
Developer of the Extended Elliott Wave Theory, an extension made to the original Elliott Wave Theory.