Sunday, November 22, 2009

10-Year US Treasury Note on the Rise - Critical Resistance at 120.17/38

10-y US Treasury Note - Weekly chart: Price is close to probing the Upper Bollinger band at 120.17. Next important Resistanc ecomes in 120.38 - the 55-Week MA.

Price consolidates with upward bias inside a rough range between 117 - 120. I'm looking at the ATR indicator for further implications of change in Volatility. There is a solid trend of range contraction and we are on the level of the Average True Range we have seen in March and September 2008. Mu take on this picture is that ranges if falling below the current 1.66 range that would most likely signal trend continuation. 55-Week MA is acting as fulcrum axis pointing the trend. Given the convergence is pivotal 55-WMA and the Upper Bollinger Band around 120.17/38 my opinion is that we might see a further advance and expansion of the BBands which would fit in the trend breakout scenario.

The Dec '08 -> March '09 Highs Trendline has already been broken the Week before and last weeks higher high is acting as confirmation to this setup. RSI is supporting the upward momentum.

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