US T Notes 10 Y 17-11

Flip Technical Coin on 10-Yr T-Notes (still)

Posted on 11/17/2017 7:35 AM by Dave Toth

A month ago in 16-Oct’s Technical Blog we discussed the 10-yr yield’s return to the middle-half of this year’s range shown in the daily log close-only chart above and the increased odds of aimless whipsaw risk.  And while the contract subsequently resumed Sep-Oct’s downtrend and tested early-Jul’s low, the yield’s rejection of the  (2.46%) upper-quarter of this year’s range has resulted in aimless, lateral chop since.  The weekly chart below shows the contract’s position deep within the middle-half bowels of this year’s 122-to-1128-range that presents a very poor risk/reward condition from which to initiate directional exposure.

Under these rangey circumstances we think it’s risky to infer or conclude anything, but the market “seems” to be trying to etch out some kind of scrolling, rounding bottom from the lower recesses of the range that has constrained it since early-Jul.  A close above 07-Nov’s 125.135 high (above that day’s 125.15 intra-day high) would be the next reinforcing evidence to such a base/reversal threat, but even then the market would still be below 13-Oct’s 125.255 high and upper boundary to the past month’s lateral range.

In sum and if a trader absolutely, positively HAS to make a directional decisions here, we’d err to the buy side with a failure below 124.06 required to negate this call.  But all these techs (or lack thereof) considered, we believe a neutral/sideline policy is best for the time being.

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