10 Year Treasury Yield--Monday, June 8, 2009
A suggested extended Fibonacci pattern taking form in the 10 year treasury yield.
The base from which the extension is being formed consists of the 3.05% top made on February 9 and the 2.46% low made on March 19. Notice how the market flirted with this top several times through February and March, but it was only after a significant fall to the March 19 low that it was able to mount a rally that broke through this resistance. (Obviously what is called a "rally" here in rates, was a bear move in the actual treasuries themselves.) The move became impulsive once the 3.05% level was broken, never falling below the top of the base since that date.
The first level of resistance projected by this pattern would be at 1.618 times the base, or 3.41%. The market approached that level on May 8, topping off at 3.39%, selling off for several days and then finding support right above the 3.05% base top 5 trading days later.
The next significant target--and a possible end point of this pattern--would be at the 2.618 extension, right around 4.00%. Say 3.95% to 4.05%.
Above that, the 4.236 extended target would come in at 4.95%.