Five-Year Treasury note futures (CBT.FV) dropped a 'big' 0.8% during Friday's session to close the day at 110-29. The decline came on a 'trend day' down pattern, where the open was in the upper 20% of the day's intra-day range while the close was in the lower 20%. Before Friday's decline, FV traded at a 20-day highs on Wednesday and Thursday. Will FV bounce back?
Q: How has CBT.FV performed in the past when, during July, it sees a 'trend day' down pattern after trading at a 20-day high the day before?
A: According to the seven previous occurrences of this event, EventEdge indicates that CBT.FV has shown a strong bullish edge that peaks 29 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Friday, July 11, 2008) is Thursday, August 21, 2008.
CBT.FV rallies in 100% of the cases (7 of 7) by an average of 1.5% relative to the close on the event date, which, based on the close of CBT.FV on the event date (110-29), provides a target price of 112-18.
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Ronish Patel is an analyst with MarketHistory.com.
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