T-Bonds

T-Bonds' nearly relentless weakness must be viewed in the context of a long-term chart to understand why it is merely corrective rather than impulsive.  This means that it is not the beginning of a bear market we have witnessed over the last few months; rather, it is a normal-looking retracement of a very powerful -- and still-promising -- bull market. For the record, the selloff has yet to retrace even half of the steep climb that took place between December 2013 and March 2015.  That would imply more downside to around 147^01, just beneath the recent low. A 0.618 retracement would require a fall to 142^20 -- quite a ways from here, although hardly inconceivable. In the meantime, I doubt that the violent short-squeeze rally that accompanied Monday's news grim news concerning Greece has ended the correction.  Accordingly, we might expect more downside to at least 144^25, the p2 Hidden Pivot support of a pattern visible in the daily chart, where A= 157^12 on May 29. _______ UPDATE (July 6, 10:48 p.m. EDT): Yesterday's explosive rally came within two ticks of a Hidden Pivot target at 152^05 that we identified in real time during an 'impromptu' tech analysis session. It would have been more impressive if it had gone just a few ticks higher, surpassing the external peak at 152^06 recorded on June 19.  That could still happen today, so we'll give bulls the benefit of the doubt for the time being. _______ UPDATE (July 8, 11:46 p.m.): Bulls have pushed higher, setting up a test of a key peak at 155^27 recorded on May 29. If they can surpass it by week's end, that would fortify the rally so far by refreshing the bullish impulsiveness of the daily chart._______ UPDATE (July 13, 12:47 a.m.): The huge swings are getting

We'd expected T-Bond prices to enjoy a strong tailwind as long as Greece's mounting financial problems remain unresolved, and so far that has proven to be the case. The question is, are there additional bullish forces acting on T-bonds that could continue to propel them higher even after the Europe's spinmeisters announce a supposed remedy? That is the same as asking whether the very nasty correction begun in early April from around 167  is over. It's still too early to say, although the rally looks promising. Technically speaking, Friday's upthrust was especially encouraging because it exceeded an external peak at 152^00 recorded on June 9, creating a bullish impulse leg and re-energizing the hourly chart (see inset). Notice as well that the move decisively exceeded the red line, a midpoint resistance at 151^11, implying more upside over the near term to at least p2=152^13, or to 153^15 if any higher. If that last number fails to slow the rally down, it would add to the evidence that the rally is not just a flash-in-the-pan. _______ UPDATE (June 22, 10:18 a.m.): T-Bond futures are getting trashed, surprise surprise. However, so wild have the swings become in this vehicle that the so-far bottom of today's plunge is merely gratuitous, having exceeded no prior lows of significance on the hourly chart. As such, the nutty price action going back to June 12 still looks like accumulation to me.  _______ UPDATE (8:10 p.m.): Sellers continued to hammer away, eventually turning the hourly chart bearishly impulsive before the session ended. This implies the futures could now fall all the way to the June 10 low at 147^16 groping for a bottom. _______ UPDATE (June 24, 6:54 p.m.):  A two-day close above 150^16 would earn this vehicle at least a temporary reprieve from the slow death

Yesterday's powerful rally came off a low just four ticks from the 147^21 Hidden Pivot target where I'd suggested bottom-fishing. Since no one mentioned having done so in the chat room, I have not established a tracking position. Be that as it may, at the closing bell the rally was a couple of ticks shy of exceeding a key 'external' peak at 150^16 from Tuesday. Early Thursday evening, however, the futures surpassed the peak, suggesting that the rally is even stronger than it initially appeared. Indeed, it has now exceeded two 'external' peaks without a pullback on the hourly chart (see inset), making a follow-through leg very likely. In the meantime, the futures could conceivably push past even more external peaks before they retrace, adding to the imputed strength of the impulse leg. Once the up-leg terminates with a point 'B' high, traders can use a pattern like the one shown to get long, presumably on a chart of lesser degree. _______ UPDATE (12:08 a.m. EDT): With no remedy in sight for Greece's problems, and time running out to fashion a deal that could be sold as constructive, U.S. Treasury paper should continue to appreciate in the days and week ahead.

The 150^07 correction target I've been drum-rolling for weeks in the June contract caught the exact low of yesterday's powerful rebound. Because the target, a Hidden Pivot, has been a while in coming, we will treat the rally as the potential resumption of the bull market begun almost exactly a year ago. The futures are not yet out of the woods, but we've taken steps to avoid pain if they should relapse to new lows.  Specifically, based on reports from subscribers who used my target to get long, I am tracking two September contracts with a cost basis of 148^07. This price imputes to the position partial profits taken at 151^09 in accordance with a recommendation I posted in the chat room at 10:39 a.m. (Note: I also emailed the guidance to hundreds of subscribers signed up for intraday notifications and alerts. As is my custom, I have used the worst price reported by a subscriber to establish an entry price.) For now, use an 'impulsive' stop-loss on the 60-minute chart. As of around 7:45 p.m. EDT, it would require an uncorrected plunge to  148^18 to trip the stop. Against that order, offer one of the two contracts to close at 152^20. ______ UPDATE (June 7, 4:00 p.m. EDT): For better or worse, a wide stop-loss allowed us to hold onto the position. Traders should adhere to the stop, which should be held in place when the futures start to trade again Sunday night. We're likely to come away with a profit come hell or high water, but if the recent low fails to contain this relapse, it will likely spell more weakness ahead for T-Bonds.  The ostensible reason for Friday's selloff was laughable (see my TLT update), which should raise the odds of a rebound on Monday. _______ UPDATE

As badly as the futures have gotten socked this week, there's still a little room before they hit a longstanding correction target at 150^07.  The ABC pattern shown is sufficiently clear and compelling to suggest that the target, a major Hidden Pivot support, will have tradable consequences (as will a Hidden Pivot at 117.23 in TLT, an ETF that can be used as a proxy for this one). T-Bond futures typically fulfill targets in all time frames with a relatively high degree of accuracy, so if you are looking to bottom-fish the easy way, try a 150^09 bid, stop 150^04 for a single contract. You can step up the size if you use 'camouflage,' but don't attempt this if you're not familiar with the tactic. If I'm in the chat room when the target is hit, I'll provide guidance in real time. (Note: The equivalent target for the September contract, 149^24, has already been reached. The discrepancy versus the June contract called for a 'camouflage' entry.  On the two-minute chart, the first such opportunity that met our criteria would have  come at exactly 7:28 EDT Thursday morning, at 149^17. Initial risk would have been a theoretical four ticks.) _______ UPDATE (11:27 a.m. EDT): Based on reports in the chat room from subscribers who reported actual fills in September T-Bonds and TLT based on my targets, I'm establishing tracking positions in both: a 117.35 costs basis for 400 shares of TLT, and 149^24 for four T-Bond contracts. (As is my custom, the prices I've used reflect the worst prices paid by subscribers.) In a 10:39 update posted in the chat room and emailed to subscribers who are signed up for intraday 'Notifications', I suggested taking a profit on half of the position(s). At the time, USU15 was trading for around 151^09,

Since the 152^22 midpoint pivot shown was central to Tuesday's price action, I'll suggest using the pattern shown for predictive accuracy and trading leverage over the next 18 or so hours. To mention just a couple of possibilities, that could mean bottom-fishing at either p2 (151^04), or at D (149^18), both with a tight stop-loss or 'camouflage'.  Notice that one might also have initiated a 'mechanical' short at 155^22 yesterday that would have missed getting stopped out by a single tick. _______ UPDATE (6:58 p.m.) The futures have turned higher after failing to reach the secondary pivot (151^04) given above. This is speculatively bullish, but I'll need to see a run-up to at least 157^13 by no later than Tuesday to be impressed.  _______ UPDATE (June 1, 9:47 p.m.):  Uh-oh. The rally from May's lows conspicuously failed to exceed a key external peak at 157^12. In fact, it tied the high -- not exactly a sign that bulls are brimming with energy. Under the circumstances, I would expect the futures to slide back to test lows near 152, or even 151, in the weeks ahead. The outlook would improve if buyers reverse the tide and blow past the May 8 high.

The futures took off Friday, generating a weakly bullish impulse leg on the hourly chart. Buyers will have to sustain the pace as the new week begins to suggest they're capable of overcoming the gravitational pull of the very important Hidden Pivot target we've been using at 150^07.  Specifically, and most immediately, they'll need to exceed 157^12, equal to the imposing 'external' peak shown. _______ UPDATE (7:48 p.m.):  Sellers brutalized T-Bonds yesterday, erasing more than half of last week's fragile gains (see above) in just a few hours.  The 150^07 long-term target is not only still viable, but also a promising place to try bottom-fishing. Prompt me in the chat room if you're interested, since we may be able to cobble together a plan on-the-fly. You can use the 30-minute chart to attempt this at prices well above 150^07, however. Using A=155^06 ( 8:30 a.m.), there are three Hidden Pivot supports where a tradable bounce could occur: p=152^31; p2= 152^16; and D=152^01.

Treasury futures have staged a strong rally from cliff's edge, technically speaking, but it would be premature to infer that the brutal correction from late January's high at 171^09 is over.  However, we can be mildly encouraged by the fact that the bounce has come from a low that lay almost a full point above the longstanding correction target at 150^07 we've been using for quite a while. It is typical of bull markets to produce corrections that don't fully correct. Still, we shouldn't assume that might the case here until the bounce has exceeded at least two prior peaks on the daily chart. That would imply a further rally to at least 157^13 (see inset), and even then the inference that the futures have embarked on the second giant leg of the steep bull run begun a year ago should be tempered with caution.

T-Bond futures had their worst day yesterday since March 6, when a four-point washout cleared the way for a rally that lasted nearly a month. Will yesterday's selloff similarly set the stage for a prolonged move higher?  My gut says no, mainly because there's an unfulfilled correction target at 150^07 that has been a month in coming. Even so, it's not too early to start looking for a possible upturn, since it would not be unusual for a correction in a bull market to fail to reach its 'd' target. At the moment, on the 15-minute chart, that would imply an uncorrected 'impulse leg' that exceeds the two labeled peaks without a correction. Conversely, any rally that falls shy of that benchmark should be regarded as a shorting opportunity, presumably via an ABC reversal on a chart of three-minute degree or less. _______ UPDATE (May 13, 12:45 a.m.): So far, the bounce is unimpressive. _______ UPDATE (7:58 p.m.): The relapse off a bull-trap high on the opening bar was not exactly a healthy sign.