...that this could be a pivotal level to watch on TY1 (10-year US continuation future) in determining whether the present bear market move continues OR whether it comes to a halt and the prior bull market in place since April continues.
The Bull Case is that it holds this support area around 108 30/32nds to 109 02/32nds which comprises a 76.4% retracement (exactly what happened when it turned higher in April this year) as well as horizontal support and that sets the platform for a renewed move higher.
This area of support roughly translates into a level of about 4.53% on the US 10-year yield.
I somehow suspect we test these levels this week.
The Bear Case would be that this support area gives way (Weekly close) suggesting that the whole period of price action from October 2023 to now has simply been a big bear flag. In that instance the suggestion would be for at least a test of the April 2024 low at 107. 04/32nds and possibly the Oct 2023 lows around 105 10/32nds.
This, if seen, could open up a scenario like that seen in August-October 2023 and a renewed bear market that could signal a danger of a new high in yields in the bear market that began in 2020
I have been biased recently that yields would head higher in the near-term and that there was a danger that could head even higher than expected.
I look at this TY1 chart and while I do not know at this point whether this pivotal support area will actually break. it does look like that if it did....it would be a major development (as would a hold TBH)
So, I think this has become one of the most pivotal levels to now watch in fixed income as we move into nd through the events of next week
