10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – August 14, 2015 Forecast

The inability to follow-through to the downside after Thursday’s sharp break is fueling a short-covering rally in the pre-market session. Since the main trend is up, this may create enough upside momentum to trigger a retracement into a short-term pivot at 128’01.5.

Trader reaction to 128’01.5 will tell us whether the buying is strong enough to challenge the recent top at 128’22, or if the selling is strong enough to produce a potentially bearish secondary lower top.

The first support angle comes in at 127’13.5 today. This was tested earlier in the session. Taking out this angle and yesterday’s low at 127’13 is likely to trigger an acceleration to the downside with the next target a potential support cluster at 127’01 to 126’31.5. The next support angle under this area is 126’26.

The major angle to watch is 126’26. This is the last major support angle before the main bottom at 126’17.5. A trade through this bottom will turn the main trend to down on the daily chart.

Overcoming the major Fibonacci level at 127’20.5 will signal the presence of buyers. If the buying is strong enough then look for an acceleration into the short-term pivot at 128’01.5.

Taking out 128’01.5 with conviction could fuel a further rally into a price cluster at 128’09.5 to 128’10. Overcoming this area will put the market in an extremely bullish position with 128’22 the next target.

Watch the price action and order flow at 128’13. This will tell us whether the bulls or the bears are in control.