June U.S. Treasury Bond futures (USM8) have been trading generally sideways at higher price levels for the past two weeks, after having backed off just a bit from the March high of 121 1/32. The overall technical picture for T-Bonds remains bullish despite the recent sideways trading range on the daily chart for June T-Bonds.
Using Inter-market Analysis, one can predict T-Bonds producing a bullish crossover by reviewing the Actual 10-day SMA Close line vs. a prediction. This suggests T-Bond futures prices will trend higher in the near term. The last bullish line crossovers occurred in late February, and prices did proceed to trend solidly higher for the next three weeks. One can also see on daily charts for June T-bonds that the bearish crossover signals have worked well for providing sell signals. On January 28 the Predicted 4-day EMA line produced a bearish crossover by moving below the Actual 10-day SMA Close line. Prices then declined for the next three weeks, into the late February low.
Also, inter-market signals have show bullish indicators. The Predicted Neural Index (PIndex), a proprietary indicator, predicts whether or not a three-day simple moving average of the typical price will be higher or lower two days in the future than it is today. The Predicted Neural Index compares two three-day moving averages to one another todays actual three-day moving average with a predicted three-day moving average derived from inter-market analysis data.
When the predicted simple three-day moving average value of typical prices is greater than todays 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. That type of information can be very helpful in establishing short-term positions in forex and other markets ahead of moves such as Tuesdays strong rise in the USDX.
For more information on a foundation of inter-market analysis, there are many good books out there- just type in inter-market analysis in any search engine. Also, try tradertech.com and tradingeducation.com for additional knowledge.
By: Erik Cocks
About the Author:
Erik is a day trader using Intermarket Analysis as a trading foundation. He uses VantagePoint software to predict market moves in the Forex, Futures, and commodities markets.
