A Bearish Treasury Bond Divergence Warning

By Christopher Diodato – TradersBase.com

Here’s a longer term warning I’m finding in bonds, specifically, the ten year treasury.  It’s a bearish divergence signal, much like the two signals that occurred in fall 2010 and 2011.  Both of these divergence signals were followed by a 5% decline in the price of the bonds in the next six months.  Here’s the chart.

Of course, this is only a warning, and there will not be a signal until we have a break below the lower trend channel.  That may not be for weeks, or even a month or two.  Isn’t it interesting, however, how we almost see a seasonal pattern in this chart?  Bonds top in summer, then decline in fall?  Anyway, here’s the video with the analysis.

Happy trading!

~Chris Diodato

Christopher Diodato

About Christopher Diodato

I have been trading since my eighteenth birthday to pay for my college tuition. It was at first rocky, but now trading is my love, my work, and my passion. In addition to my experience in markets, I have passed all three exams to obtain the Chartered Market Technician (CMT) credential. I believe that I am the youngest to ever do so! I want to help out small investors to make some money on the side. There's a common notion out there that "big money" rules all. I disagree. With enough hard work and discipline, anyone can become the next Paul Tudor Jones!