September U.S. T-Bond futures (ZBU25) present a selling opportunity on more price weakness.
See on the daily bar chart for September U.S. Treasury bond futures that prices are starting to trend down. See at the bottom of the chart that the moving average convergence divergence (MACD) indicator has just produced a bearish line crossover signal, whereby the red MACD line crossed below the blue trigger line.
Fundamentally, the U.S.-China trade war is starting to bite U.S. businesses and the ripple effects will soon begin to bite U.S. consumers. The negative economic impact of the U.S.-China trade war on both countries is very evident when examining ocean shipping volumes. Bloomberg recently reported a one-third drop in import volumes coming into The Port of Los Angeles, which is the busiest container port in North America. A shipping CEO told Bloomberg that ocean shipping from China is down 60%.
In the coming weeks there will likely be a serious negative ripple effect on many U.S. businesses. It won’t be long until product shortages start showing up on U.S. retailer shelves. That spells rising inflation, and in turn higher bond yields (lower prices).
A price move in September U.S. T-Bond futures below chart support at 113 10/32 would become a selling opportunity. The downside price objective would be 107 even, or below. Technical resistance, for which to place a protective buy stop just above, is located at 116 even.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
