Looking at the December 10-year note, we have a high for the contract at overnight 139-200 and a low of 139-095 and are currently trading 139-125. Yesterday, after the close, a big pharmaceutical company came out and said they were halting trials on a vaccine for Covid-19 due to some side-effect induced complications. This development sent stocks sharply lower early in the overnight session and sent the notes to the high of the night at 139-200. The euphoria ended rather quickly, and stocks regained their footing rather and are showing some decent strength this morning with the S&P up 60 as traders finally bought the dip after three days of carnage. Whether the gains will be sustained will be determined at the close today as the notes will likely trade opposite of where stocks are going. Technically, the notes are trading in a sideways to down pattern as the market looks to retest lasts weeks low at 138-22. If we break the price, we could see 138-08-10 area, but if that level should hold a test of last nights high looks to be in the cards. Traders should be watching price action in stocks today and if we can see weakness later in the day, notes certainly could catch a bid.

10-Year Note Dec ’20 Daily Chart
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Greg Perlin

Senior Market Strategist

Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.

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