Wednesday’s Outlook Of US Treasury Bond

The 30 Year T-Bond futures tumbled yesterday in reaction to the huge surge in U.S. equities.  Even though the 30 Year futures sold off, they are holding comfortably above March lows on Wednesday morning.

Therefore, the futures are trying to hold onto the uptrend while avoiding our 2^nd tier downtrend line.  The lack of commitment to the downside in the 30 Year futures shows traders aren’t entirely convinced by the rally in the S&P futures on Tuesday.

However, despite the present stabilization in the 30 Year futures, the momentum remains to the downside due to the large supply of long-term bonds to fund the government’s stimulus package.

If equities can follow through on their rally, we may very well see a breach of the significant March lows.  Therefore, the next few sessions will play an important role in determining the near-term trend direction of the 30 Year futures.

Fundamentally, we see resistances of 126.734, 127.422, 127.91, and 128.563.  To the downside, we find support of 125.75 with 2^nd tier and bottom-end waiting at 125.031 and 124.594, respectively.  The 30 Year Treasury Bond futures are currently trading at 125 27.5.

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