TBOND pushes through key technical resistance level
U.S. Treasury Bond (TBOND) Technical Analysis Report for Jan 15, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, TBOND ended Wednesday at 158.594 gaining $0.625 (0.4%). Today's close at 158.594 marks the highest recorded closing price since December 11, 2019. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 158.000, T-Bond confirmed its breakout through the previous session high after trading up to $0.719 above it intraday.
Daily Candlestick Chart (TBOND as at Jan 15, 2020):
Wednesday's trading range has been $0.875 (0.55%), that's below the last trading month's daily average range of $1.195. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TBOND.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 158.281 (now S1), which is likely to act as support going forward.
Crossing above the upper Bollinger Band for the first time since August 7, 2019, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 156.895 or signal the beginning of a strong momentum breakout leading to even higher prices. The last time prices broke out above the upper Bollinger Band on August 1, 2019, TBOND gained 0.70% on the following trading day.
Although 30-year Bond is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Further buying might move prices higher should the market test December's nearby high at 160.406.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) above 80" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 321 times, TBOND closed higher 50.47% 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 54.52% with an average market move of 0.21%.
With four out of the other four Bond Markets closing higher today, the ones that stand out on the positive side are BUND gaining 0.35% and TNOTE10Y closing 0.15% higher. None of the markets ended the day in the red. Read more