For nearly a week, 10yr Treasury yields had been treating 3.18% as a floor (3.178% was the lowest close over the past 4 days.  That arguably changed yesterday, with the entire session trading under 3.18% despite a late day sell-off that almost spoiled the party.  With overnight strength, bonds are now in a position to confirm the technical breakout.

That would be a small victory.  3.18% is a short-term, intermediate pivot point at best.  What we'd really like to see is a confirmed break below the most serious floor of the past 3 weeks at 3.13%.  Realistically, that would require a move below 3.11% (which would break yesterday's intraday lows--also the intraday highs from September 25th).  The following chart splits the difference at 3.12%, but let's not split hairs.  The point is there's a zone of yields from 3.11-3.13% acting as a bigger-picture floor.  We could even through in the middle bollinger band at 3.14% to round out today's resistance barriers.

2018-10-24 open2

With stocks in sharp focus yesterday, it's worth keeping an eye on the stock/bond relationship again today.  They won't necessarily trace each other in lock-step, but any pronounced selling in equities stands a very good chance to give bonds a boost.  We're not necessarily doomed to forego such triumphs simply because stocks rallied yesterday afternoon.  They, too, have been in a moderate downtrend recently--even if we measure that trend based on their stronger levels of any given day, as seen in the following chart.

2018-10-24 open

Today's calendar brings the week's first relevant economic data and Treasury auction.  New Home Sales isn't necessarily a top tier report, but a big deviation from expectations has been known to have an impact from time to time.  The 1pm 5yr Treasury auction is in a similar position.  It usually doesn't have an impact, but unexpectedly strong/weak results can cause exceptions.