From the January 01, 2011 issue of Futures Magazine • Subscribe!

Tech Talk: Even bond trends must end

In November, the front month U.S. 30-year Treasury bond futures broke below 126-24. That level was not mere support, but the midway point between the all-time high made in December 2008 and the June 2009 low.

Retracements of 50% serve as strong support/resistance and pivot levels, particularly when they involve such volatile moves as we saw with the 30-year in 2008-09. The long bond has continued to fall and will likely test the 2010 low of 114-11 in January before testing the lower end of the 25-year long-term trend channel, roughly at 112-21, referenced in the main story. If the long-term trend channel is taken out, a larger and more dramatic downturn could ensue, though the 2009 low, 111-25, could provide a speed bump.

In the meantime, the fourth quarter weakness makes testing the lower end of that trend channel likely and there is plenty of room before it gets there.


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Jack Broz trades from the floor of the CBOT and provides analysis on the bond market at TradeBondFutures.com.

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