TBOND runs into sellers again around 155.094
U.S. Treasury Bond (TBOND) Technical Analysis Report for Jul 11, 2019 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, TBOND ended Thursday at 153.156 tanking $1.375 (-0.89%) on high volume. Today's close at 153.156 marks the lowest recorded closing price since June 5th. Closing below Wednesday's low at 153.906, the contract confirmed its breakout through the previous session low after trading up to $0.937 below it intraday.
Daily Candlestick Chart (TBOND as at Jul 11, 2019):
Thursday's trading range has been $2.125 (1.37%), that's far above the last trading month's daily average range of $1.117. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TBOND.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 152.969 earlier during the day, the Bond bounced off the key technical support level at 153.094 (S1). The failure to close below the support could increase that levels importance as support going forward. Unable to break through the key technical resistance level at 154.688 (R1), T-Bond closed below it after spiking up to 155.094 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. After having been unable to move above 155.250 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 155.094.
Crossing below the lower Bollinger Band for the first time since March 1st, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 155.233 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 1st, TBOND actually gained 0.37% on the following trading day.
While 30-year Bond is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Further selling might move prices lower should the market test June's close-by low at 152.844.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "5 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 29 times, TBOND closed higher 75.86% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 72.41% with an average market move of 1.09%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are BUND losing -0.57% and TNOTE10Y closing -0.46% lower. None of the markets managed to end the day in the green. Read more