10 Year Note Futures---The 10 year note in the March contract settled last Friday in Chicago at 123/16 while currently trading at 122/26 down about 22 points for the trading week as I have been recommending 2 short positions with the original around the 123/24 area and the 2nd around the 123/12 level and if you took those trades place the stop loss come Monday's trade will be lowered to 124/00 as the chart structure will improve on a daily basis next week.
The 10 year note is trading below its 20 and 100 day moving average as this trend has accelerated to the downside as we are now yielding about 2.58% as the U.S stock market is hitting another all-time high in today's trade as the higher stock prices go the higher the bond yields will go in my opinion so stay short as I still think we could trade as high as 3.50% later this year.
Money flows are coming out of the bond sector and into the equity market as I think that will continue for some time to come as I still don't see any ceiling happening in the U.S stock market as I think we will trading above 30,000 in the months ahead in the Dow Jones Industrials and that should put pressure on bond yields, however if you are not short this market wait for some type of price retracement before entering a fresh position therefore lowering the monetary risk.
Historically speaking the yield on the 10 year note is extremely low as we used to trade around the 6% level so there is a lot of room to run especially if we can get a 4% GDP in the months ahead.
CHART STRUCTURE: SOLID
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