30-Yr U.S. Treasury Bonds (US) Futures Technical Analysis – October 15, 2014 Forecast

December 30-Year U.S. Treasury Bonds surged to the upside on Tuesday as buyers continued to follow-through after taking out the May 1, 2013 top at 142’04.

The strong buying also kept the steep uptrending channel intact. The upper level of the channel comes in at 144’13 today. The lower level is at 142’11.

Taking out 142’11 will be the first sign of weakness, but the market is not likely to accelerate to the downside unless the old tops at 142’04 and 141’30 are taken out with conviction.

The daily chart indicates there is plenty of room to the downside if 141’30 fails. The next potential support levels don’t come in until 140’11 and 139’29.

The recent rally has been fueled by concerns the weakening global economy will encourage the Fed to postpone its first interest rate hike since 2008. In addition, T-Bonds have been driven higher because of the sell-off in the equity markets. If the stock indices start to recover then look for profit-taking to hit the T-Bonds.