10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 16, 2014 Forecast

A massive short-covering rally, driven by panic buying helped trigger a surge by the December 10-Year U.S. Treasury Notes on Wednesday. The move produced a new all-time high at 130’17.

As the buying eased, the market gave back more than half of its gains and closed at 128’18, just slightly above an uptrending Gann angle at 128’08. This is the support today.

T-Notes also managed to breakout of an up channel. Falling back below 128’08 will put the market back inside the bullish channel. If the selling pressure is strong enough then sellers may push the market back into the support line of the channel at 127’02.

The daily chart indicates that if the support at 127’02 fails the selling pressure could drive the market back into a pair of uptrending angles way down at 125’30 and 125’28.

The tone of the day will be determined by trader reaction to 128’08. The catalyst behind the movement today will be the stock indices. If the indices continue to decline then T-Notes may rally again or at the least be underpinned. If stocks put in a bottom and rally then look for T-Notes to weaken.