10-Yr U.S. Treasury Notes (TY) Futures Technical Analysis – October 7, 2014 Forecast

December 10-Year U.S. Treasury Notes rallied on Monday, making 124’26 a new minor bottom. The minor range is 125’23 to 124’26. Its pivot at 125’08.5 is controlling the short-term direction of the market. Trader reaction to this price will likely set the tone for the day.

Besides a break of the pivot price at 125’08.5, crossing to the bearish side of a downtrending angle at 125’08 will also be a sign of selling pressure. This may generate enough downside momentum to challenge the nearest uptrending angle at 125’00. If this price fails then look for the selling to continue down to Friday’s low at 124’26.

Holding 125’08.5 to 125’08 will indicate that buyers are coming in to support the market. This could lead to a breakout over the closing price reversal top at 125’23. If this top fails then the reversal will be negated, but don’t expect an acceleration to the upside unless the downtrending angle at 125’26 is taken out with conviction. This is the last angle before the August 15 main top at 126’12.

Watch the order flow and price action at 125’08.5.