T-Note Bullish Count Fades

April 13, 2018 7:31AM CDT

Yesterday's break below 05-Apr's 120.165 initial counter-trend low confirms a bearish divergence in daily momentum and reinforces our bearish count discussed in 05-Apr's Trading Strategies Blog. This resumed weakness leaves Wed's 121.035 high in its wake as the latest smaller-degree corrective high and new short-term risk parameter from which an advised bearish policy and exposure can be objectively rebased and managed.

The daily chart below shows the bearish divergence in momentum after what clearly is only a 3-wave recovery from 15-Feb's 119.14 low. Left unaltered by a recovery above 02-Apr's 121.12 high, this 3-wave bounce is considered a corrective/consolidative event ahead of the eventual resumption of the secular bear trend shown in the weekly chart below.

These issues considered, a bearish policy and exposure remain advised with a recovery above 121.04 required to defer or threaten this call enough to warrant its cover. In lieu of such strength we anticipate at least a return to the lower-quarter of the past couple months' range straight away and eventually a resumption of the secular bear trend to new lows below 15-Feb's 119.14 low.

T-Note Jun '18 Daily Chart

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