Wesley Chapel, Florida, December 22, 2008 — U.S. 10-year Treasury note futures on the Chicago Board of Trade are presently in a steep seven-week-old uptrend on the daily bar chart and last week hit a fresh contract and all-time high as a “flight-to-quality” into safe-haven U.S. Treasuries continues amid the financial market woes of the industrialized world.
Price action Friday saw a profit-taking pullback amid a market that is still firmly bullish. The VantagePoint Intermarket Analysis trading tool (www.TraderTech.com) suggests more profit-taking pressure is likely in the near term. VantagePoint is a valuable trading tool that employs intermarket analysis to forecast near-term price trends.
The VantagePoint daily bar chart for March T-Notes shows that the Predicted Neural Index is presently reading 0.00, suggesting some more downside price pressure in the near term. 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.
Source: VantagePoint Intermarket Analysis Software (www.tradertech.com)
Also note on the daily chart for March T-Notes that the Predicted Stochastic indicator has just produced a bearish line crossover signal, whereby the %D line has crossed below the %K line. The Predicted Stochastic indicator is based on the position of the close relative to the high or low of the day. During periods of price decreases, the daily closes tend to accumulate near the daily lows. During periods of price increases, the daily closes tend to accumulate near the daily highs. The Predicted Stochastic indicator is an oscillator designed to predict overbought and oversold conditions one day in advance.
Predicted Stochastic predicts a 14-day stochastic oscillator one day ahead, comparing the market’s current close to its price range over a period of time. Stochastic Trigger predicts a 3-day moving average (%D) of the stochastic oscillator (%K) one day ahead.
The Predicted Stochastic charts the two lines, Predicted Stochastic (%K) and Stochastic Trigger (%D), plotted on a scale ranging from 0 to 100. Readings above 80 predict an overbought condition; readings below 20 predict an oversold condition (thresholds indicated by dashed lines on chart).
The Predicted Stochastic (%K) line is faster and more sensitive than the Stochastic Trigger (%D) line. When the Predicted Stochastic (%K) crosses over the Stochastic Trigger (%D) line in overbought (>80) or oversold (
