[USU3, Daily] September Treasury Bond Futures
After last Thurday's expanded range down day, we discussed that this plunge must be getting near a climax.
On Friday, the USU3 gapped down and reversed. The two-day Japanese candlestick is almost a piercing pattern, but would have been good to see it claw back to the middle of last Thurday's trading range before the close. Nevertheless, it did try to reverse, so if the bounce starts from here, it will be no surprise. We can say that the T Bonds have factored in no lowering of rates at the FOMC meeting next week. LOL!
ADX is 49 on the daily chart, and this is definitely an extreme for this symbol and timeframe. It's even high now than it was at the parabolic top in May, if you can believe it.
We've put on the old fibonnaci ruler here to mark out upside targets, should there be upside continuation. Given the extreme that we've seen on the ADX, it would not be surprising if there is a big bounce after the big plunge, but perhaps supply and demand will not allow it. Suffice to say that initially we should look for our usual 25% to 40% bounce of the last leg down, producing targets between 107^06 and 108^31 with last Thursday's high of 108^17 rounding out the projections.
Obviously, the gutsy swing trade is to buy after Friday's high is taken out, and see if there is a one or two-day bounce.
03.08.04 08:36 #