TBOND finds buyers at key support level
U.S. Treasury Bond (TBOND) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, TBOND ended the month 2.22% higher at 182.438 after gaining $0.344 (0.19%) today on high volume. Today's close at 182.438 marks the highest recorded closing price since March 9th. Trading up to $0.469 lower after the open, T-Bond managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TBOND as at Jul 31, 2020):
Friday's trading range has been $1.156 (0.63%), that's slightly below the last trading month's daily average range of $1.161. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TBOND.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 181.656 earlier during the day, 30-year Bond bounced off the key technical support level at 181.938 (S1). The failure to close below the support might increase that levels importance as support going forward.
Crossing above the upper Bollinger Band for the first time since July 23rd, 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 180.319 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 July 23rd, TBOND actually lost -0.12% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the upper Bollinger Band" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for T-Bond. Out of 98 times, TBOND closed lower 61.22% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after five trading days, showing a win rate of 55.10% with an average market move of -0.09%.
With three out of the other four Bond Markets closing higher today, the ones that stand out on the positive side are TNOTE10Y gaining 0.12% and TNOTE5Y closing 0.11% higher. On the flipside the worst performer has been BUND closing -0.13% lower. Read more