10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 2, 2014 Forecast

A flight-to-safety rally caused the December 10-Year U.S. Treasury Notes to surge through a key retracement zone on Wednesday. Since this move was triggered by the sell-off in the stock indices, traders are going to have to monitor their activity to determine the tone and direction of the T-Notes today.

Technically, the main trend is up on the daily chart. The main range is 126’12 to 123’16. Its retracement zone is 124’30 to 125’09. Wednesday’s upside breakout makes the upper or Fibonacci level at 125’09 the firs support level. The next is the lower or 50% level at 124’30.

Holding over 125’09 could generate enough upside momentum to challenge the nearest downtrending angle at 125’27.5. This is the last resistance angle before the main top at 126’12.

Breaking through 125’09 could lead to a break into the 50% level at 124’30. If this level fails then look for further downside pressure into the nearest uptrending Gann angle at 124’20.

Watch the action in the stock indices today for clues as to the T-Notes direction. If stocks continue their sell-off then look for more upside action. If stocks rebound then T-Notes are likely to pull-back into 125’09 to 124’30.