TBOND breaks below Monday's low
U.S. Treasury Bond (TBOND) Technical Analysis Report for Sep 10, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, TBOND finished Tuesday at 160.844 tanking $1.594 (-0.98%). Today's close at 160.844 marks the lowest recorded closing price since August 9th. Closing below Monday's low at 162.312, 30-year Bond confirmed its breakout through the previous session low after trading up to $1.750 below it intraday.
Daily Candlestick Chart (TBOND as at Sep 10, 2019):
Tuesday's trading range has been $2.500 (1.54%), that's far above the last trading month's daily average range of $1.895. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for TBOND.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 162.094 (now R1), which is likely to act as resistance going forward. The last time this happened on September 5th, TBOND actually gained 0.25% on the following trading day.
Crossing below the lower Bollinger Band for the first time since July 12th, 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 164.397 or signal the beginning of a strong momentum breakout leading to even lower prices.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 565 times, TBOND closed higher 55.75% 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 57.35% with an average market move of 0.36%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are TNOTE10Y losing -0.6% and TNOTE5Y closing -0.41% lower. None of the markets managed to end the day in the green. Read more