30-Yr U.S. Treasury Bonds (US) Futures Technical Analysis – November 22, 2013 Forecast

Oversold technical conditions helped form a potentially bullish closing price reversal bottom on the December 30-Year T-Bond Treasury chart. If this chart pattern is confirmed then look for the start of a two-to-three day retracement of the last break.

The daily chart indicates that a move through 131’11 will confirm the closing price reversal bottom at 130’14. Based on the short-term break from 133’10 to 130’14, the first upside target is a retracement zone at 131’28 to 132’07. Under normal trading conditions, upside momentum should take this market back to this zone over the next two to three days.

Fundamentally, there is no strong reason to expect a retracement, other than technically oversold conditions. Investors are still trying to decide the timing of the Fed tapering, but the majority still feel that April 2014 is the most likely time period.

Some are holding out hope that the reduction in monetary stimulus will begin in December. Investors will get the chance to debate this since the next major report is the U.S. Non-Farm Payrolls report on December 6. If this report blows away the estimates then a serious debate can begin for a December taper.

Counter-trend traders may want to take advantage of the closing price reversal bottom since the chart indicates there is plenty of room to the upside. The retracement zone at 131’28 to 132’07 seems like a reasonable short-term price target.