On the June T-Bond’s daily chart, the clean lines of the downtrend strongly imply another leg down before sellers might conceivably be washed out. To be precise, the unachieved target lies at 112^09, a quite nasty fall from yesterday’s settlement price of 115^02. The bearish outlook is corroborated by the ease with which sellers punched through the midpoint sibling of the target, 118^00. Another negative is that downside targets derived from two lower point ‘A’ alternatives — labeled A1 and A2 here — have already been exceeded. We’ll want to attempt bottom-fishing if and when the target is approached, but that looks like it could still be a week or two away. We should also leave room for a surprise in the form of a bullish reversal. However, it would take a print at 116^24 to signal that today. _______ UPDATE: During this morning’s briefing, I provided targets for the September contract. A Hidden Pivot at 110^07 is equivalent to 112^09, but there is another at 111^07 that warrants scrutiny, since it could engender an important turn. The latter number is my minimum downside projection, and my confidence is high that it will be reached or exceeded before Bonds can turn around. Both targets can be bottom-fished with a stop-loss as tight as 4 ticks.
