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Continued T-Note Erosion Defines New S-T Bear Risk; Trail Stops

Posted 09/14/2018 1:50PM CT | RJO Market Insights

Overnight’s break below the past few days’ 119.09-area support reaffirms our bearish count and leaves yesterday’s 119.19 high in its wake as the latest smaller-degree corrective high the market is now minimally required to recoup to stem the slide with a confirmed bullish divergence in momentum.  In lieu of such 119.19+ strength at least the intermediate-term trend remains down and should bot surprise by its continuance or acceleration.  Per such traders are advised to trail protective buy-stops to 119.20 on shorts recommended at 120.17 OB in the then-prompt Sep contract in 27-Aug’s Trading Strategies Blog.

10-Year Note Dec '18 240 Minute Chart

 

10-Year Note Daily Chart

This tight but objective risk parameter at 119.19 may come in handy given the market’s encroachment on the lower-quarter of the 121.12-to-118.10-range that has dominated/constrained most of this year’s price action.  This said, against the backdrop of a secular bear trend from Jul’16’s 134.075 high that we believe could span a generation, there’s no way to know at this junction that 22-Aug’s 120.24 high and key longer-term risk parameter didn’t COMPLETE another bear market correction ahead of a resumption of the secular bear to new lows below 118.10.

We will certainly be on high alert for any bullish divergence in shorter-term momentum from the (sub-119.02) lower-quarter of this year’s range that would likely expose another intra-range rebound of indeterminable scope and warrant the cover of currently-advised bearish policy and exposure.  In lieu of such a sell-off stemming mo failure further and possibly accelerated losses should not surprise.  In sum, a bearish policy and exposure remain advised with a recovery above 119.19 required to threaten this cal enough to warrant its cover.

10-Year Note Weekly Chart

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