Bill Fleckenstein has influenced many of my views on investing over the past few years. Summarizing some of his best advice, even if convinced that events will play out in a certain way, you need to be patient and always on the lookout for clues that things are changing. With that in mind, I offer one year daily charts for 10-year and 30-year treasury yields. There has been some conversation lately about whether the trend has changed and we might expect to see higher yields going forward (I think that outcome is inevitable, but the question for debate is whether yields have actually bottomed yet).
On both charts you'll notice a narrow trading band since last summer, following a steep decline that roughly coincides with the debt downgrade. But that's not the interesting part. What I'm noticing is the lower of two trend lines that date back to the beginning of the time horizon captured. On both, but more recently for the 10-year, what was upward resistance has become support. Although subtle and maybe just temporary noise on the chart, we may be entering a period where the trading band is starting to move up -- in other words, higher yields. Not conclusive, but definitely worth paying attention to.
