The short term trend chart of the US Treasury 10 Year Yield Index [TNX] moved back to a negative trend after breaking a double bottom 23.75 (2.375%). This places both the long and short term charts of TNX back in the same trend - negative. In addition, the TNX is on the verge of moving to a new low for the year. If it breaks a double bottom at 23 (2.30%), it would move it back to levels it last saw in June 2013.
As a result of the selling pressure across the global markets, we've witnessed some subtle changes over the last month on the Asset Class Matrix. Most notably is the rise in strength of the US Dollar [UUP], as it has risen the most number of spots on the matrix ranking over the past 32 days. In addition, we've seen Long Term Bonds [TLT] and Investment Grade Corporates [LQD] rise, as well. Areas that have dropped in rank are the Bearish Dollar [UDN], the Euro [FXE], and the Yen [FXY]. Latin America [ILF] has also fallen two spots, falling from 15 to 17th place. We have yet to see the recent weakness translate into a plethora of long term sell signals for equities against the other asset classes, but if this weakness continues, the complexion of the matrix will ultimately change, shifting to a more defensive looking one.
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DWA - DIF Broker
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