Posted on Sep 21, 2023, 08:31 by Dave Toth


The past couple days’ clear break below 22-Aug’s 109.095 low reinstates and reaffirms the 3-year secular bear market from Aug’20’s 140.13 all-time high.  The 240-min chart below shows that this resumed weakness leaves corrective highs of various scales at 109.17, 110.075 and 111.125 as the mini, short- and long-term bear risk parameters the contract must recover above to defer, threaten and then negate a continued bearish policy and exposure.  Until and unless such strength is shown, the trend is down on all scales and should not surprise by its continuance or acceleration straight away.

On a much longer-term basis, the weekly chart below shows this week’s break below Oct’22’s 108.265 low that not only reinstates the secular bear trend, but also exposes an indeterminable area below the market that is totally devoid of any technical levels of merit.  In effect, there is no support.  The ONLY levels of any technical merit now exist only above the market in the form of recent corrective highs noted above.  And until/unless such highs are recouped, the major bear trend remains intact.

The daily (above) and weekly (below) close-only charts of actual 10-yr yields show the resumption of the secular move higher in rates.  3-mo and 6-month rates have yet to reach new highs, so a little flattening of the curve is unfolding, but nowhere near enough to alleviate the massive yield curve inversion that has been intact for quarters now and continues to warn of recession (or worse) and a negative effect on equites.  31-Aug’s 4.108% corrective low yield detailed above correlates with 01-Sep’s 111.125 corrective high in the contract as the key flexion points and risk parameters this market needs to break to threaten the secular bear trend in T-Note prices and rise in rates.  Former 4.21% resistance is considered new near-term support ahead of still higher rates.

These issues considered, a bearish policy and exposure remain advised in the contract with strength above at least 109.17 and preferably 110.075 required to defer or threaten a bearish count and exposure enough to warrant defensive measures.  In lieu of such strength, further, indeterminable losses are expected.


The technical construct and expectations for the Dec24 SOFR contract are identical to those detailed above in the 10-yr with corrective highs at 95.485, 95.66 and 95.865 considered our new mini, short- and long-term bear risk parameters.  A bearish policy and exposure remain advised with strength above these levels required to pare or neutralize bearish exposure commensurate with one’s personal risk profile.

RJO Market Insights

RJO Market Insights specializes in forward-thinking analysis, focused on potential market-moving events and dominant factors driving price discovery. Detailed fundamental and technical coverage across multiple commodity sectors is combined with objectively-constructed trade recommendations to provide an industry-leading product for R.J. O’Brien’s Institutional clients, commercial hedgers, introducing brokers and individual investors free of charge. Content is distributed in both text and audio formats, with specialized service offerings provided by account type.
For more information on RJO Market Insights, contact your broker or RJO representative.