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![](https://rjofutures.rjobrien.com/images/2020/01/10yr-note-240min-chart.gif)
Threats to a broader bearish count began with early-Jan’s bullish divergence in shorter-term momentum as introduced in 06-Jan’s Technical Blog. Now, after 24-Jan’s recovery above the pivotal 130.05-area, subsequent trendy, impulsive price action higher reinforces a count calling for a resumption of the secular bull trend after a clear 3-wave and thus corrective structure to Sep-Dec’s 132.13 – 127.295 decline as labeled in the daily chart below.
Overnight’s break above Tue’s 131.06 high detailed in the 240-min chart above reaffirms the developing uptrend and leaves yesterday’s 130.135 low in its wake as the latest smaller-degree corrective low the market is now minimally required to fail below to confirm a bearish divergence in short-term mo, stem the rally and expose at least an interim correction lower. Per such, we are defining 130.13 as our new short-term risk parameter from which shorter-term traders with tighter risk profiles can objectively rebase and manage the risk of a still-advised bullish policy and exposure.
![](https://rjofutures.rjobrien.com/images/2020/01/10yr-note-daily-chart.gif)
Looking at actual 10-yr yields in the daily close-only chart below, 28-Jan’s 1.656% minor corrective high is analogous to our 130.13 short-term risk parameter in the contract. From a longer-term perspective, 03-Jan’s 1.79% low is assumed to be the 1st-Wave down of an eventual 5-wave sequence down from 23-Dec’s 1.928% high. If this (5-wave-down) bearish count is correct, this market shouldn’t come anywhere near that 1.79% threshold, the recovery above which would render Dec-Jan’s rate relapse a 3-wave and thus corrective event that would resurrect a broader base/reversal count in rates and peak/reversal count in the contract. We’re defining the analogous longer-term risk parameter to a resumed long-term bullish count in the contract at 06-Jan’s 129.21 high. This is our key bull risk parameter for long-term players.
These 130.13 and 129.21 risk parameters may come in handy as this market engages the upper recesses of the past four months’ 132.13 – 127.29-range in the contract and lower recesses of its 1.46% – 1.93%-range in rates. Until and unless the contract stems its clear and present and developing uptrend with a failure below at least 130.13 and preferably 129.21, further and possibly accelerated gains should not surprise.
![](https://rjofutures.rjobrien.com/images/2020/01/10yr-yield-daily-chart.gif)
The weekly chart below shows the magnitude of the secular bull trend from Oct’18’s 117.13 low and how relatively minor Sep-Dec’s relapse attempt appears, well within the bounds of a mere (4th-Wave) correction ahead of one final (5th-Wave) gasp by the bull that could provide another golden opportunity for long-term debt financing and mortgage re-fis. A likely contributing factor to such continued strength in Treasuries however is, unfortunately, the threat of a larger-degree correction in equities. As we don’t expect anything more than a slightly larger-degree corrective setback in equities however, we would also surmise any final poke higher in the T-Note contract to be short-lived.
These issues considered, a bullish policy and exposure remain advised with a failure below at least 130.13 required for shorter-term traders to move to the sidelines. Commensurately larger-degree weakness below 129.21 is required for long-term players to neutralize exposure. In lieu of such weakness,, further and possibly accelerated gains should not surprise.
![](https://rjofutures.rjobrien.com/images/2020/01/10yr-note-weekly-chart.gif)