December Treasury note futures (ZNZ25) present a selling opportunity amid further price weakness.
In the daily bar chart of December Treasury bond futures you can see that prices are in an incipient downward trend. Also see at the bottom of the chart that the Moving Average Convergence Divergence (MACD) indicator is in a bearish stance as the blue MACD line is below the red trigger line and both lines are trending down.
Crucially, persistent US inflation keeps bond yields high (lower prices). Additionally, there are growing concerns about the troubled US budget deficit that are prompting investors, including sovereign nations, to avoid buying US Treasuries.
A move in December T-Note futures below chart support at last week’s low of 112.06.0 would give the bears more power and also become a selling opportunity. The downside price target would be 110.00.0 or less. Technical resistance, for which a protective buy stop can be placed just above, is located at 113.00.0.
IMPORTANT NOTE: I am not a futures broker and I do not manage any trading accounts other than my personal account. My goal is to point you to potential business 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 can initiate. Any trade I analyze is hypothetical in nature.
Here’s 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 investing 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 beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations when entering into those contracts. You should understand your risk exposure and other aspects of trading by carefully reviewing the risk disclosure documents your broker is required to provide you.
As of the date of publication, Jim Wyckoff had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com