Treasuries are resuming their bear trend, with 10yr yields pushing above 2.839%, the Nov-21 high and BofAML's MacNeil Curry warns "Treasuries are in trouble." They continue to target a break of 3.00% in the sessions ahead. This is the September/3m range highs. However, they are most focused on 5yr yields and TYH4 (10Y March futures). Remember, Curry cautions, with the MOVE Index turning higher [4], Treasuries are moving into a more volatile environment. Price action in the next week or so could be explosive. Of course, while the trend (and consensus) is your friend in this view, given the Fed's dominant position, there is always the chance of a short squeeze [5].
Via BofAML,
US 5yr yields are completing a 2m Head and Shoulders Base on the push above 1.449%/1.473%. A daily close above 1.449%, ideally 1.473% confirms this formation, targeting 1.670%/1.659% and potentially beyond.
[6]
We prefer to express this view by selling TYH4. It is completing a 2m Head and Shoulders Top on the break of 124-20+/124-14+. Downside targets are seen to 122-06+ in the weeks ahead. We recommend scaling into shorts at 124-14+ and then 124-20+, with a stop above the Dec-03 high at 125-07. More conservative accounts should wait for a daily close below 124-14+ (or a FRIDAY close to avoid event risk).
[7]
Sell TYH4 at 124-14+, then 124-20+, risking 125-08, targeting 122-06+