Daily September 30-Year Treasury Bonds

30-Yr U.S. Treasury Bonds (US) Futures Analysis – July 3, 2013

On Wednesday, the private forecasting firm ADP reported better-than-expected jobs data, triggering a sell-off in the September 30-Year Treasury Bonds. This information is often used to predict Friday’s U.S. Non-Farm Payrolls report.

Based on the market action, it looks as if investors are looking for a strong report on Friday. The size of the move suggests investors believe Friday’s jobs report will be strong enough to indicate a strengthening economy. The reaction by traders suggests the jobs report will be strong enough to bring the Fed closer to tapering is aggressive monthly bond-buying stimulus program.

Technically, aggressive sellers took action before the market completed a normal 50% correction in a bear market. The original upside target was 137’00. The actual high reached 136’27 before the sellers showed up.

Daily September 30-Year Treasury Bonds
Daily September 30-Year Treasury Bonds

The formation of a closing price reversal top indicates that an important top may be in place. This chart pattern typically leads to the start of a 50% retracement of the last rally. Based on the move from 133’04 to 136’27, traders should look for a minimum break to 134’31. If the momentum is strong enough, the market may even test a Fibonacci level at 134’17.

Besides the failure to reach the 50% target at 136’27, the first sign of weakness was the inability of a steep Gann angle at 136’20 to hold the rally. Since the daily chart indicates there is plenty of room to the downside, investors should look for a pullback into another uptrending Gann angle at 134’28.

With the main trend down on the daily chart and the closing price reversal top indicating a downward bias, trend traders are still in control. Based on this assessment, it is going to take a major failure in Friday’s jobs report to trigger a reversal back up. This means the downtrend is likely to continue over the near-term with 133’04 the next major downside target. 

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.

Leave a Reply

Your email address will not be published. Required fields are marked *