TNOTE2Y dominated by bears dragging the market lower throughout the day
U.S. 2-Year T-Note (TNOTE2Y) Technical Analysis Report for Aug 07, 2020 | by Techniquant Editorial Team
TNOTE2Y ended the week -0.05% lower at 110.445 after losing $0.024 (-0.02%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 110.461, the market confirmed its breakout through the prior session low after trading up to $0.023 below it intraday.
Daily Candlestick Chart (TNOTE2Y as at Aug 07, 2020):
Friday's trading range has been $0.046 (0.04%), that's far above the last trading month's daily average range of $0.032. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TNOTE2Y.
Regardless of a strong opening the contract closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 110.453 (now R1), which is likely to act as resistance going forward. The last time this happened on July 27th, TNOTE2Y actually gained 0.02% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the eight 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 2Y T-Note. Out of 533 times, TNOTE2Y closed higher 52.16% 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 52.35% with an average market move of 0.02%.
With four out of the other four Bond Markets closing lower today, the ones that stand out on the negative side are TBOND losing -0.4% and TNOTE10Y closing -0.13% lower. None of the markets managed to end the day in the green. Read more