Two-year note futures (CBT.TU) have recorded declines on both of the first two days of the week. TU crossed below its lower Bollinger band (20-day, 2 standard deviation bandwidth) on Tuesday after dropping 0.3% to close at 105-15. But, TU tends to bounce back after such an event during the month of June.
Q: How has CBT.TU performed in the past when, during June, it crosses below its lower Bollinger band?
A: According to the seven previous occurrences of this event, EventEdge indicates that CBT.TU has shown a very strong bullish edge that peaks 32 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, June 10, 2008) is Friday, July 25, 2008.
CBT.TU rallies in 100% of the cases (7 of 7) by an average of 0.4% relative to the close on the event date (June 10), which, based on the close of CBT.TU on the event date (105-15), provides an approximate target price of 105-58.
To view this idea in EventEdge® click here.
Note that our SeasonalEdge® analysis tool shows that CBT.TU has been somewhat bullish after June 10th or closest trading day.
Ronish Patel is an analyst with MarketHistory.com.
