2 YEAR T-NOTE INDICATING FURTHER TIGHTENING ??

We will look at the critical 2 year treasury note and develop a price action based prognosis on future interest rate directions. The market made a pivot high of 104 during September 2024. This region constituted a strong supply zone based on strong selling that came about in this range earlier in March 2023.

Recently in December 2024, we saw renewed selling at 103. What is very interesting about this selling is that the pivot at 103 represented a strong 38% reversal on the overall decline from September 2024. Generally, such a shallow reversal indicates continuation of the overall direction; which in this case happens to be bearish. Moreover, the sell-off on 10th January may also give a sense of things to come.

The selling did reverse from above 102 which is a demand zone, however, price action has been extremely weak so far. On the shorter time frames, we are looking at some sort of struggle between buyers and sellers. However, the market so far is indicating impulsive moves on the downside if prices do not reject this level quickly to the upside.

So in line with our overall paradigm of staying with the trend; the trend is definitely bearish as of the writing of this article and our view will hold till we see price action that suggests to the contrary. Our expectation of interest rates stays bullish.