TNOTE5Y pops to highest close ever
U.S. 5 Year T-Note (TNOTE5Y) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, TNOTE5Y ended the week 0.23% higher at 125.305 after gaining $0.571 (0.46%) today on low volume. Today's close at 125.305 marks the highest recorded closing price ever. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 125.125, 5Y T-Note confirmed its breakout through the prior session high after trading up to $0.234 above it intraday.
Daily Candlestick Chart (TNOTE5Y as at Mar 27, 2020):
Friday's trading range has been $0.625 (0.5%), that's below the last trading month's daily average range of $0.942. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for TNOTE5Y. Prices continued to consolidate within a tight trading range between 124.586 and 125.477 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on November 6, 2019, TNOTE5Y actually lost -0.39% on the following trading day.
Buyers managed to take out the key technical resistance level at 125.297 (now S1), which is likely to act as support going forward. After having been unable to move lower than 124.680 in the previous session, the market found buyers again around the same price level today at 124.734.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 125.477 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 124.586 where further sell stops could get activated. With prices trading close to this year's high at 125.898, upside momentum might accelerate should the contract be able to break out to new highs for the year.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for 5Y T-Note. Out of 87 times, TNOTE5Y closed higher 62.07% 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 64.37% with an average market move of 0.18%.
With four out of the other four Bond Markets closing higher today, the ones that stand out on the positive side are TBOND gaining 1.78% and BUND closing 1.05% higher. None of the markets ended the day in the red. Read more