March 30-Year U.S. Treasury Bonds are trading higher following Friday’s sharp sell-off. The overnight inside move is most likely position-squaring and profit-taking.
The main range is 142’11 to 151’28. Its retracement zone is 147’03 to 145’31. On Friday, the market successfully tested the upper or 50% level at 147’03 when it stopped the break at 147’01.
Although the main trend turned down on the daily chart on Friday when the market took out the last main bottom at 147’12, there may be one more retracement in order to form a potentially bearish secondary lower top.
If the break continues today then look for potential support at the 50% level at 147’03, Friday’s low at 147’01 or a series of longer-term uptrending support angles at 146’14, 146’04 and 146’03. A counter-trend buying opportunity could emerge from anyone of these levels with 146’04 to 146’03 being the best support cluster.
On the upside, the first target is a steep downtrending angle at 148’28. Overcoming this angle with conviction could trigger a further rally into angles at 147’27 or 150’12.
The main trend may have turned down according to the charts on Friday, but there was no follow-through move today. Without any news to drive the market today then look for the start of a retracement to the upside. In my opinion, there has to be a secondary lower top before we can be certain that a top is forming.