Bond downtrend continues while targeting 143

Major financial markets are continuing on their budget and tax deal-induced behaviour, with the MAR13 E-mini S&P 500 futures contract up again today, this time trading up just above unchanged at +.15%.  The MAR13 E-mini Nasdaq is also positive today, trading up around 4 points, or +.16%. Many other commodities markets are quiet today. For example, gold and silver are slightly down on the day thus far, crude oil is hovering very close to unchanged levels from yesterday, and corn futures are also very close to unchanged levels.

However, there are a few commodities on the move today. Sugar futures continue their behaviour which we deem as overall bearish. Sugar recently snapped below a very key 19 cent support level, but quickly rallied back above the level. Now, sugar is down 2.7% today, trading at 19.16 cents. Natural gas, after a brief consolidation, has gone down significantly over these past two days. Today, natural gas is down over 1%, trading at $3.20. To us, this level is a very important pivot level.

In addition, coffee and orange juice also are having relatively large down days. Coffee continues to hold below our key long term pivot level of $150. Coffee futures are down 1.54% today, trading at $147.10. Orange Juice futures, after a big weather-related rally, has sold off rapidly from the key $1.40 level, and is now down 2% today, trading at $1.1425.

We focus our technical analysis on the U.S. 30-year bond futures market. We notice that a downtrend channel resistance line has been forming since December. The market has been staying below this important line. Also, we see a very key resistance level just below the 149 mark, and we believe the market will stay below this level as long as the equity markets continue to rally. We see a highly significant support line at 145, and the market is approaching this key support with velocity. Our technical downside target is 143.

Tomorrow we have the huge non-farm payrolls report. If the number comes in very high, for example 250K or higher, we could see this target hit tomorrow or the following week.

Click to enlarge.

About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome