Perspective Directive

Things could be different
But that'd be a shame, 'cause
I'm the one who could feel the sun
Right in the pouring rain
--Lou Gramm

This afternoon I read some comments on a sell off in bond land. I headed to the charts to see what was happening. Below is a daily chart of the 10 yr Treasury note yield (TNX). Sure enough, 10 yr yields have rallied more than 10% since the beginning of October. Not a good thing for things like mortgage rates.

For longer term perspective I pulled up the TNX chart on a weekly basis spread over nearly 4 yrs. This chart looks a lot less 'urgent.' A small countertrend rally in a multi-year downtrend. Technically, there's nothing to get excited about unless the TNX rises thru about 38 (or 3.8% yield). That level what suggest a change in longer term trend.

The lesson here? Time frame, cookie. What appears true in one horizon may look different in others. Varying time horizons improves perspective.

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