Ten-year T-Notes (CBOT:TYU14) made a new high last Friday but left some of that sessions gains on the table.
The Friday before, TYU had relinquished nearly all of a similarly sized advance. In between, a ‘bullish engulfing’ was seen as a continuation pattern.
During the last 4 sessions, there has been some bearish developments which could be marking a top.
Friday/Monday created a bearish ‘harami’ and Tuesday seemed to confirm with a bearish ‘shooting star’. Today’s weaker price action if it holds or is added to by the close would further put into question the viability of the current bullish trend.
However, positioning and current economic and monetary policy conditions allow for still higher TY prices. Further, there is a lot riding on today’s FOMC minutes. The Minutes will not likely clear away uncertainty about the Fed’s policy path. It is also unlikely that the Minutes will portray Fed employment and inflation goals as nearly reached.
As such, the prospects for still lower yields appear strong and there may be value in the latest price concession.