March/April I was quoted as saying the U.S. 10-Year yield won't break 2.72; August/September I said that it wouldn't break 2.66. Both held as the downtrend continued.
At 2.09, a fresh downtrend is underway.
The 250- and 150-day averages are located at 2.86 and 2.91. When 2.63 and 2.64 broke below, the downtrend continued. Longer-term reveals the real trend. The break of 2.52 then 2.30 placed present trend between 2.09 - 0.87. Only a break above 2.30 and 2.52 would see higher yields but then 2.63, 2.64 and 2.73 must break higher to see a run toward 2.86 and 2.91. Hardly likely and certainly not anytime soon.
The days of 3.0 yields is gone for quite some time as 3.0 hasn't been seen except for 6 times in the last year and those times were in the beginning of 2013. The target on the 250 day average is 2.19, target on the 150 day is 2.10. Longer term reveals targets at 2.30 and 1.88. Price closed at 2.14. The 250 and 100 day averages sees current prices middle bound in the distribution but longer term, 2.09 begins the freash downtrend that will see lower yields over time.
The 250-day average on the U.S. 2-Year yield sees an average at 0.41, target at 0.33 inside a distribution between 0.35 0.16. Only a break above 0.38 has a chance to break the 0.41 average. For the past year, 2-year yields saw a low at 0.28 in early 2013 and high at 0.59 but 0.59 closed 5 times and in the last 19 days. 0.59 broke the last 0.58 highs seen 7 times in the last year and occurred within the last 24 days.
Obviously the concern with dramatic yield drops is recession as yields invert particularly the 10 and 3 month. The 10 year yield closed today at 2.15 and current 3 month yield is 0.02. With a yield spread at 2.13, 10-year yield minus Fed Funds close at 0.09 to reveal 2.06, the 10 year yield is correctly priced but has further to drop.