Bonds
Wednesday the Bond ground lower than I had expected as the USH traded in a slightly above average 1-29-point daily range (avg. is 1-21-pts) and settled down 1-09-points on the session at 152-01. I am happy to see both the Bond and Ten-year continue to hold below my key resistance levels (153-01 and 154-03 and 125-02 and 125-10 respectively) as the previous session’s trade put some doubt into yesterday’s call for lower prices. I continue to look for lower prices however it appears the market is confined to a consolidation trade for the near term. Keep in mind since the market is holding below my upper weekly boundary levels I look for the USH to test 150-17 and 150-06/00 possibly 149-15/10 (see Tuesday’s report). Today the USH should trade between at least 151-11 or 151-06 and 152-09/13. If the lower level is broken the Bond should set its sights on 150-17 and 150-06/00. If the upper level is broken the Bond should re-test 153-01 and 153-10.
Support can be found at 151-11, 150-21, 150-17, 149-24, 149-10/08, 149-04/02, 148-27, 148-12/10, 148-00, 147-21, 147-14/13, 147-04, 146-25, 146-18, 145-31, 145-09, 144-18 and 144-08. Resistance should be met at 152-09/13, 153-01, 153-10, 153-22, 154-03, 154-26/155-00, 155-13, 157-17, 160-11, 160-24, 161-11, 162-20, 163-17, 163-23/25 and 163-30.
Ten Year Notes
Yesterday the Ten-year ground lower than I had expected as the market appears to have resumed its correction phase. The TYH traded in an above average 31-tick daily range (avg. is 22-ticks) and settled down 16+-ticks on the session at 124-23. Although I was concerned for the downmove given Tuesday’s strength and resiliency, Wednesday’s sell-off enhances my call for a move to 124-00/123-28 possibly 123-19/15. Today the TYH should trade between at least 124-10/08 and 125-00/02. If the lower level is broken the TYH should test 124-00/123-28. If the upper level is broken the Note should test 125-10. Keep in mind a settlement above 125-10 would go a long way in confirming higher prices (not expected this week).
Support can be found at 124-14, 124-10/09, 124-00, 123-28, 123-19/15, 123-07, 123-00, 122-26, 122-14, 122-02+, 121-16 and 121-08. Resistance should be met at 124-28, 125-02, 125-10, 125-16, 126-05, 126-16, 127-10, 128-15 and 128-21/24.
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