Bonds
It took all session to sell-off (so far a minor correction) as the USH tested my maximum upper daily boundary and key resistance level at 154-03 (see several past reports). The USH traded in a below average 1-13-point daily range and settled on the session low down 7-ticks on the day at 152-19. There is no change to the technical outlook as the conflicting technical signals coexist. I maintain my call for lower prices that was supposed to begin Thursday and carry into early next week as the USH is expected to test 150-17, 150-06/00 and possibly 149-15/10. Although I embrace the call for lower prices my moving average cross is beginning to exhibit a bullish signal (Ten-yr. does not confirm this view yet). As previously mentioned until the Bond takes out and settles above 153-01 and 154-03 (something the Bond failed to do for weeks), I look for losses. Today the USH should trade between at least 151-25 or 151-17 and either 153-01 possibly 153-16/22. If the upper level is broken the Bond should test 154-03.
Support can be found at 152-08, 151-25/23, 151-11, 151-06/04, 150-22/18, 150-17, 149-24, 149-10/08, 149-04/02, 148-27, 148-15/14, 148-12/10, 148-00, 147-21, 147-14/13, 147-04, 146-25, 146-14, 145-31, 145-09 and 144-08. Resistance should be met at 152-28, 153-00/01, 153-22, 154-03, 155-13, 157-17, 160-11, 160-24, 161-11, 162-20, 163-17, 163-23/25 and 163-30.
Ten Year Notes
The Ten-year traded in a disappointing 18+-tick daily range and settled up 2+-ticks on the session at 124-28+. Again the Ten-year flirts with my key resistance targets at 125-02 and 125-10 and lacks the necessary momentum to breakout and failed to post one settlement above these levels. Although the Note remained firm all day Thursday the Note is expected to sell-off and test 123-24/22 or 123-17/16. I maintain the view from several weeks ago it will take two consecutive settlements below 123-03 to target the 32 year Bull trendline (121-08) and 119-31 and a move 125-02 and 125-10 for me to reconsider the long-term trend’s bullish bias and embrace a call for a move to at least 126-05 and 126-16. Today the TYH should trade between at least 124-14/10 and 125-00/02. If the upper level is broken the TYH should test 125-08/10. If the lower level is broken the Note should test 124-00.
Support can be found at 124-14, 124-10/09, 124-00, 123-28, 123-24/22, 123-17/15, 123-07, 123-00, 122-26, 122-14, 122-02+, 121-16 and 121-08. Resistance should be met at 1125-00/02, 125-08, 125-10, 126-05, 126-16, 127-10, 128-15 and 128-21/24.
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