The US 10-year nominal yield has been on a volatile path, with a notable rise and fall in 2024. For investors and traders following this benchmark, understanding the directional cues can be critical. A closer look at DeMark Indicators, especially when overlaid on the yield chart, offers a perspective on potential turning points and trend shifts.

DeMark Indicators, widely used by technical analysts, help identify areas of trend exhaustion. They consist of a series of proprietary tools that generate “signals” based on price exhaustion and reversal patterns. Among them, the “TD Combo” is especially popular, as it combines various DeMark signals to enhance accuracy in spotting potential tops and bottoms.

Key Insights from Recent DeMark Signals on the US 10-Year Yield

1. Signal for Lower Yield: Earlier in 2024, the DeMark Indicators showed a clear signal for a drop in the 10-year yield. This signal, which often indicates that the yield might be peaking and due for a pullback, played out as expected with a downward shift in yields.
2. Signal for Higher Yield: As the yield dipped into the mid-2024, DeMark Indicators suggested a potential bottom, signaling the likelihood of a reversal toward higher yields. This proved accurate, as yields began a steady climb, confirming the efficacy of the DeMark Indicators in capturing these turning points.
3. Pending Pullback Signal: Fast forward to late 2024, and the DeMark indicators are once again flashing caution. The current setup is signaling a potential tactical pullback, implying that the recent rise in yields might be unsustainable in the near term. Traders watching this are cautious, as any upward pop in yields could face resistance, with a likely pullback following shortly.

What This Means for Investors

For those tracking the US 10-year yield, these DeMark signals can serve as a valuable guide. The recent rise in yields may not have much further to go, at least in the short term. If a yield pullback occurs, it might offer an opportunity for those seeking lower entry points, particularly if they’re looking to capitalize on potential dips before yields resume a broader uptrend.

In volatile markets, tools like DeMark Indicators are not a guarantee but rather a supplementary guide. They provide insights based on price behavior, helping traders anticipate potential trend changes. The current setup suggests a cautious approach, as the recent yield rally may encounter short-term resistance.

Whether you’re an active trader or a long-term investor, understanding yield movements and potential turning points is key. DeMark Indicators, with their systematic approach, offer a way to anticipate these changes with greater confidence. In a landscape where bond yields directly impact everything from mortgage rates to stock valuations, keeping an eye on these signals can help you stay a step ahead in a shifting market.

As always, while technical indicators provide useful insights, combining them with broader macroeconomic factors and risk management strategies can lead to more informed and balanced investment decisions.