SEP 10-Yr T-NOTES

The extent and impulsiveness of the market’s decline following 27-Jun’s short-term mo failure discussed in that day’s Technical Blog is impressive and defines 14-Jun’s 127.08 high as one of major importance and possibly the end or upper boundary of a major correction within a new secular bear market in T-note prices.  From a very short-term perspective overnight’s continuation of this slide leaves yesterday’s 125.16 high in its wake as the latest smaller-degree corrective high the market now has to sustain losses below to maintain a more immediate bearish count.  Its failure to do so will confirm a bullish divergence in short-term momentum, stem the slide and expose what we’d believe to be is just a slightly larger-degree and interim correction ahead of eventual resumed losses.  In this regard 125.16 is considered our new short-term risk parameter to recent non-bullish decisions like long-covers and cautious bearish punts.