You will recall I’ve been long-term bearish US 30-year T-bond futures for quite some time, dating back to at least the bearish key reversal posted during August 2020 (discounting the Covid-19 induced chaos of the previous March). After the August close of 177-12 the nearby futures contract fell to an initial low of 169-16 during November before rallying to close at 173-25. The market then consolidated during December before heading down again following the turning of the calendar page to 2021. Early Wednesday morning, January 6, the March issue posted a new 4-month low of 169-14. As Chaos reigns in nearly every commodity market, one that is following its technical patterns the best continues to be US T-bonds.
Where to from here? With monthly stochastics still bearish above the oversold level of 20%, the market looks to have more room to the downside with the initial target at 165-11. This price marks the 38.2% of the previous uptrend from the low of 136-16 (October 2018) through the August 2020 high of 183-06. If the major (long-term) trend extends, the 50% retracement level is down at 159-27.