U.S. Treasury Bond Futures (CBT.US) bounced back on Thursday stopping a bearish move before nearing the recent lows of July or June; they crossed back above the 200-day average with a 'very big' 1.4% rally. The rally brought the market back above where it was before the recent three-day sell off. EventEdge indicates that this move is quite bullish over the history of CBT.US.
Q: How has T-bonds responded to crossing above its 200-day average on a 'very big' rally?
A: According to the 10 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that T-bonds have shown a strong bullish edge that peaks 23 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Thursday, August 7, 2008) is Wednesday, Sept. 10, 2008.
CBT.US rallies in 90% of the cases (9 of 10) by an average of 2.5% relative to the close on the event date. The average of the one decline is 1.8%. The overall return of the 10 cases is 2.1%, which, based on the close on the event date (116-08), provides a target price of 118-22.
To see this in EventEdge® click here.
Mickey Schoenhals is an analyst with Markethistory.com.
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