by Erik McCurdy
The following technical and cycle analyses provide short-term forecasts for the 10-year Treasury note yield. For intermediate-term outlooks see the latest intermediate-term forecast and for long-term outlooks see the latest long-term forecast.
technical
Yields closed sharply lower Tuesday (16 December 2014), returning to previous lows of the downtrend from April. Technical indicators are extremely bearish overall, strongly favoring a continuation of the decline.
Click for larger image.
cycle
We are 7 sessions into the decline phase of the cycle following the short-term cycle high (STCH) on December 5. An extended decline phase that moves below the alpha low (AL) in October near 1.87% would reconfirm the current bearish translation and favor additional short-term weakness. Alternatively, a quick rebound followed by an extended rally phase that moves well above the STCH in November near 2.41% would signal the likely transition to a bullish translation. The window during which the next STCH is likely to occur is from December 29 to January 19, with our best estimate being in the January 5 to January 9 range.
Click for larger image.
Short-term Outlook
The bearish scenario is highly likely (>80% probable).
