TBOND closes below its opening price unable to hold early session gains
U.S. Treasury Bond (TBOND) Technical Analysis Report for Jan 28, 2020 | by Techniquant Editorial Team
TBOND finished Tuesday at 161.000 losing $1.031 (-0.64%). Trading $0.812 higher after the open, the Bond was unable to hold its gains as the bears took control ending the day below its opening price. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (TBOND as at Jan 28, 2020):
Tuesday's trading range has been $1.906 (1.18%), that's above the last trading month's daily average range of $1.280. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for TBOND.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 160.125 (S1). After having been unable to move lower than 161.000 in the prior session, the market found buyers again around the same price level today at 160.875. The last time this happened on January 16th, TBOND actually lost -0.38% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 158.194.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the seven 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. While it is usually interpreted as bearish, it has actually shown to be bullish for T-Bond. Out of 564 times, TBOND closed higher 56.38% 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 58.33% with an average market move of 0.39%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are BUND losing -0.39% and TNOTE10Y closing -0.26% lower. None of the markets managed to end the day in the green. Read more