Yields near their long-term average

As investors weigh the potential for a new administration, another round of stimulus, and (hopefully) good news on the pandemic, yields on longer-term Treasuries have quietly risen.

Now, for the first time in more than 200 days, the yield on 10-year Treasury notes is nearing its 200-day moving average.

10 year Treasury yield nears 200 day moving average

 It's been more than 9 months since the yield was within 10 basis points of its average. That's one of the longest streaks in nearly 60 years, with only a handful of dates eclipsing it.

When a streak of more than 6 months of being at least 10 basis points under its 200-day average finally ended, it usually did not precede a further rise in yields - there was no time frame in which the 10-year yield rose more than half the time.

What else is happening

These are topics we explored in our most recent research. For immediate access with no obligation, sign up for a 30-day free trial now.

  • Signals showing future 10-year yield when it nears its 200-day average for the first time in a long while
  • Forward returns in stocks, the dollar, and gold, too
  • No utility stocks were above their 200-day average a few months ago, and now more than 80% of them are - what happens next
  • Leading economic indicators are showing signs of recovery
  • For the first time in months, more "mom and pop" investors are bullish than bearish

Stat Box

Half of all utility stocks are now overbought, according to the Relative Strength Indicator. Over the past 20 years, this has happened on 115 other days, leading to an average return of -2.6% over the next 2 months.

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Sentiment from other perspectives

We don't necessarily agree with everything posted here - some of our work might directly contradict it - but it's often worth knowing what others are watching.

1. Money managers are betting on copper to a historic degree - Mike McGlone via Daily Shot

2. Speculators are long the dollar for the first time in months - Pictet

3. Optimistic stock investors - and pessimistic commodity investors - have driven the stock/commodity ratio to an extreme - Fidelity

The post titled Yields near their long-term average was originally published as on SentimenTrader.com on 2020-10-23.

At SentimenTrader.com, our service is not focused on market timing per se, but rather risk management. That may be a distinction without a difference, but it's how we approach the markets. We study signs that suggest it is time to raise or lower market exposure as a function of risk relative to probable reward. It is all about risk-adjusted expectations given existing evidence. Learn more about our service , research, models and indicators.

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