March U.S. Treasury bond futures (US H3) prices this week hit a fresh contract low. Bond market bears still have the overall near-term technical advantage as a 2.5-month-old downtrend is in place on the daily bar chart. It appears the market place has taken a more “risk on” trader mentality, as seen by the price declines in safe-haven U.S. Treasuries. However, the bond market is now due for an upside corrective bounce.
The next downside price breakout objective for the T-Bond bears is closing March futures prices below solid technical support at the contract low of 142 5/32. The next upside technical objective for the bulls is to produce a close above solid technical resistance at 144 16/32.
The T-Bond market is a very important “outside market” that impacts other markets on daily basis. My friend and respected industry professional Louis Mendelsohn has been studying this phenomenon, called “Intermarket analysis,” for decades.
From an important Intermarket analysis perspective provided by VantagePoint Intermarket Analysis software (www.TraderTech.com), it appears there will be an upside corrective bounce in T-Bond futures in the near term.
VantagePoint is a valuable trading tool for which a trader can glean clues on potential near-term price trend changes, technical corrections within a trend, or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.
See on the VantagePoint daily bar chart for March Treasury bond futures that the Predicted Short Term Crossover study shows the blue predicted 2-day exponential moving average has just crossed above the actual black 5-day simple moving average close, and both lines are trending higher, which is a near-term bullish signal.
The Predicted Short Term Crossover is the predicted 2-day exponential moving average of typical prices two days ahead (P2EMA+2) crosses above or below the actual 5-day simple moving average close (A5SMA).
Also see at the bottom of the daily chart for March T-Bond futures that VantagePoint’s Predicted Neural Index (PIndex) is also in a bullish mode, with a reading of 1.00. The PIndex is a proprietary indicator that predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another – today’s actual three-day moving average with a predicted three-day moving average.
When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is “1.00,” indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is “0.00,” indicating the market is expected to move lower over the next two days.
The Predicted Neural Index is either correct or incorrect so its performance can be measured in terms of percent correct to produce the accuracy statistics cited for VantagePoint, which has a predictive accuracy rate of around 85% across a wide range of markets and time spans in ongoing research.
