Wednesday, May 18, 2016

Treasury Ten Year - Cash & Futures



Ten Year Treasury - Cash Levels
Cash Tens (1-5/8th of 5-26) made auction buyers good by Friday’s close, but have since fallen off.  Peaking at 99-10+, 10’s stair-stepped lower to this morning’s low of 98-17 – just reached.  10’s appear to have been held bid from continued buying interest out the curve as the Treasury curve (5-30’s) has plummeted over the last 7 trading sessions from 1.415% on the 9th to this morning’s 1.286%.  On the hourly candlestick chart there is a bearish shooting star at 10:00 (CST) yesterday and subsequent hourly price action has been confirming of steadily building bearish momentum.   
Support 98-12, 98-02, 97-26
Resistance 98-23, 98-30, 99-06+




Ten Year Treasury - Future Levels

Ten Year Future (TYM6) followed relatively tight channel trade coming down from the Feb 11th ‘bearish shooting star’ high and recovering from the stair-step, March 23 ‘bullish engulfing’ low. That upward sloping channel collected trade until the bearish break of April 12th, after which the contract had been confined to a modest downward sloping or nearly sideway consolidation. A support trend line dating from the April 26th, 129-09 low was broken on Monday.  The price action over the Friday/Monday period created a bearish engulfing on the candlesticks and the bearish implications of that formation was confirmed in yesterday’s lower close.  Price action is currently moving below slight support at 130-08+, leaving open a decline to the 50 day moving average at 129-31+.  Below, support is expected just above 129-00 and again at the mid-March, bullish engulfing low just above 128-00. 
Support: 129-05; 128-23+; 128-10+
Resistance: 130-19; 131-01; 131-13

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