March U.S. T-Bond (ZBH26) futures present a selling opportunity on more price weakness.
See on the daily bar chart for March U.S. Treasury bond futures that prices are trending down and have this week hit a four-week low. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish posture, as the red MACD line is below the blue trigger line and both lines are tending down. The bears have gained technical power recently.
Fundamentally, U.S. inflation remains sticky even though it’s not real problematic. Federal Reserve Chair Jerome Powell at the last FOMC meeting leaned surprisingly hawkish on U.S. monetary policy, indicating a rate cut in December is not a given. And, bond traders are worried about less demand for U.S. Treasuries coming from countries that have historically held U.S. Treasuries in the sovereign reserves. All of the above are bearish elements for the U.S. Treasury futures markets.
A move in March T-Bonds below chart support at this week’s low of 116 even would give the bears more power and it would also become a selling opportunity. The downside price objective would be 112 even, or below. Technical resistance, for which to place a protective buy stop just above, is located at 118 even.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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