Technical Analysis of the 10-yr Treasury Note

Today I want to take a look at what the US 10-year Treasury Note futures are doing. There was a bond auction on Thursday that brought some intraday volatility to the bond market. But has anything changed? I personally don't think so. I believe this chart tells the real story.

We're looking at a 1 year daily candlestick chart for $ZN_F  to represent the benchmark 10yr note. Look at the series of higher lows since last summer with clear overhead supply just above the 125 level. I really love it when we have a flat top like this:

Also noticed what originally sparked this rally: it was a failed breakdown in early September combined with a bullish divergence in momentum. Isn't that nice?

The more times that a level is tested, the higher the likelihood that it breaks. We're now going on 6 attempts to break through this resistance. When you have prices above their 50 and 200 day simple moving averages, with a beautiful uptrend line like this, it almost seems inevitable that a breakout is coming.

This isn't the best news for interest rates. Looks like they are heading a lot lower if/when we do get this breakout in bonds.

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Tags: $ZN_F $ZB_F $TLT $TYX $TNX $IEF