10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 22, 2014 Forecast

December 10-Year U.S. Treasury Notes finished lower on Tuesday after straddling an uptrending angle, or lower level of the up channel for most of the day. The close below the support line of the channel gives T-Notes an early downside bias today.

Today’s key uptrending angle comes in at 128’02. A failure to overcome this angle will be a sign of weakness. A sustained move through this angle should trigger a move into the 50% level at 127’00.5.

There may be a technical bounce on the first test of this level, but if it fails then look for an acceleration into the cluster of support at 126’14, 126’12 and 126’06.

Overcoming 128’02 and sustaining the move could trigger a rally back to the upper end of the channel at 129’08, but this is unlikely unless the stock market sells off sharply.

Watch the price action and order flow at 128’02. Trader reaction to this number will determine which way the market will move today. Also continue to monitor the action in the equity markets for directional clues.