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“Death-Cross Getting Close in 10-Year Note Yield”

Since 1982 there have been 29 “death-cross” signals but also 30 “golden-cross” signals in daily 10-Year Note yield chart. Apparently, these signals may have some relevance only if we already know the direction of the trend.

Credit goes to Paul Portesi for noticing this great revelation by MSM since I do not follow most of them to reduce noise:

https://twitter.com/paulportesi/status/1083144875782991872

Here is the relevant chart:

Actually, the “death-cross”, as they call it, will occur today, Thursday, January 10, 2019, if the yield closes below 2.86%, as a simple projection of moving average cross shows.

Since 1982 there have been 29 such ‘death-crosses” with the 50-day simple moving average crossing below the 200-day simple moving average. This is natural consequence of the long downtrend. But there have also been 30 “golden-crosses” in the same period with the 50-day simple moving average crossing above the 200-day simple moving average and despite that the yield has fallen over time from 13.87% to 2.33%, as shown below:

Golden-cross dates and corresponding yield

Therefore, despite the persistence of the “golden-cross” signals, the downtrend remained intact. This time could be different and in spite of the death-cross, an uptrend can develop but no one knows what will happen; these signals are irrelevant, and this is the point. They are good only for entertainment purposes. This is what it boils down to: these signals are useful provided the direction of the trend is already known. But if the direction is known, there are probably better signals one could use to maximize performance.


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