30-Yr U.S. Treasury Bonds (US) Futures Technical Analysis – October 2, 2014 Forecast
December 30-Year U.S. Treasury Bonds soared on Wednesday after taking out the upper-end of a major retracement zone as well as a pair of downtrending angles from the 140’16 top. The rally stopped just short of the last angle before this main top.
Since the main trend is down on the daily chart, the move was most likely triggered by short-covering due to aggressive flight-to-safety buying triggered by the sell-off in the stock indices. Look for more upside action today if stocks continue to break. The downtrend is likely to resume if stocks rebound to the upside.
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The main range is 140’16 to 135’13. The retracement zone formed by this range is 137’31 to 138’18. Wednesday’s surge began when traders took out the upper or Fibonacci level at 138’18. It continued to pick up steam on a break out over the downtrending angle at 139’00. The rally started to weaken slightly above a downtrending angle at 139’24, but below the angle at 140’04.
The close under the steep uptrending angle at 139’29 gives the market a downside bias on the opening today. Overcoming this angle will put T-Bonds in a bullish position.
Look for more selling pressure under 139’00. This could trigger a break into the Fibonacci level at 138’18.
T-Bonds are going to react to the stock market today so use it as a gauge of strength and weakness. Another sharp sell-off could trigger a short-covering rally through 140’16, but a rebound in the stock market should send the T-Bonds back to 138’18.