USM10

The futures are at a crucial resistance -- the 124^31 Hidden Pivot midpoint of the big pattern shown in the chart.  It projects to as high as 130^04 (!), but there is also a lesser bullish pattern that suggests 128^17 is possible without a lot of strain. It's midpoint sibling lies at 125^07, so let's stipulate that if the the futures exceed 125^07 on a closing basis for two consecutive days, they should be considered on their way to significantly higher prices. That would be bad news for equities in the U.S. and elsewhere, since it implies a full-blown panic into the supposed safety of U.S. Treasury paper.

Pretty amusing, what passes for "safety" these days, eh? It looks like the bullish frenzy will continue, since Friday's surge speared what had appeared to be a daunting midpoint resistance on the daily chart at 124^31. The 'D' sibling target of that number lies  at 130^04, and although it's difficult to imagine what manner of deranged thinking could conceivably push bonds, even in a Great Recession, to that level, the charts are telling us we should not be surprised if it happens.  For your information, the rally equates to an interest rate of about 2.86% on the 10-Year Note (see inset).

Two strong uptrends are at work right now, both of them visible on the hourly chart (see inset). The larger projects to 119^04, the smaller to 119^14, and their respective midpoints lie at 117^21 and 116^26.  The lower midpoint has already given way, implying that we should use the other, 117^21, as a minimum upside target for the near term.  A close above it would hint of more strength to at least 119^04.