Daily September 10-Year Treasury Notes

10-Yr U.S. Treasury Notes (TY) Futures Analysis – July 3, 2013

The September 10-Year Treasury Notes posted a closing price reversal top on Wednesday, setting up the market for a follow-through trade to the downside. Since bottoming on June 24, the market has embarked on a slow and steady climb toward a retracement zone at 127’13 to 127’31. Had it reached this zone, this would have represented a normal correction in a bear market.

Sellers came in early, however, forming the reversal after ADP jobs data was reported better-than-expected. This news spooked weak longs into believing Friday’s jobs data will keep the economic recovery on course while bringing the Fed closing to winding down its aggressive bond-buying program.

Daily September 10-Year Treasury Notes
Daily September 10-Year Treasury Notes

A follow-through break through the low at 126’06 will confirm the chart pattern and set up the market for a near-term correction into a retracement zone at 126’01.5 to 125’25.5. On Thursday, the market took out an uptrending Gann angle from the 125’00.5 bottom at 126’24.5 with conviction. This sets up an eventual downside target at another Gann angle at 125’28.5.

Technically, it looks as if the market is set up for further downside action as traders position themselves for Friday’s major U.S. Non-Farm Payrolls report. The combination of the Gann angle at 125’28.5 and the Fibonacci angle at 125’25.5 creates a potential downside target. This area could prove to be support if counter-trend buyers step up. If the buying fails to materialize, then look for an acceleration to the downside.

Although the market did not reach the retracement zone, the top at 127’02 came as no surprise since the main trend is down and trend traders tend to sell rallies in bear markets. Brace yourself for excessive volatility on Friday. 

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.

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