TBOND breaks back below 50-day moving average
U.S. Treasury Bond (TBOND) Technical Analysis Report for Jan 13, 2020 | by Techniquant Editorial Team
TBOND ended Monday at 157.219 losing $0.469 (-0.3%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (TBOND as at Jan 13, 2020):
Monday's trading range has been $0.844 (0.54%), that's below the last trading month's daily average range of $1.295. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TBOND.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the Bond closed lower but above the previous day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 156.875 earlier during the day, 30-year Bond bounced off the key technical support level at 157.156 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on January 2nd, TBOND gained 1.06% on the following trading day. T-Bond closed back below the 50-day moving average at 157.595. After having been unable to move above 157.812 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 157.719.
Though the contract is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 157.812 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 155.906 where further sell stops might get activated. With prices trading close to this year's low at 155.156, downside momentum could speed up should TBOND break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 110 times, TBOND closed higher 60.00% 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 58.18% with an average market move of 0.33%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are BUND losing -0.32% and TNOTE10Y closing -0.17% lower. None of the markets managed to end the day in the green. Read more