T-Note (H&S Pattern Confirmed)

Friday's action confirmed a H&S Top pattern with the close below the neckline.  The objective is ~ 126 17/32 with stops in at 131 5/32.  Friday's low found support at a previous swing low (green support line), it's 50 EMA, and the Monthly S1 pivot.  If we can get a break below this support area, then you should see a test of the pattern objective.  There is also a 100 EMA and a Monthly S2 pivot in the same area as the pattern objective.  This could be a good area for the T-Note to bounce higher and test the highs if we can get there.  I expect the current support area to hold for a few days before moving lower.

10 Year Note

There is a possible H&S Top forming on the daily chart for the December T-Note futures.  This market has had a huge run up this past year and is due for a correction.  Even if the H&S objective is met, the bull trend will still be intact so this could still be a good time to short this market for a quick profit.  First, we got bearish divergence on the RSI.  Prices made higher highs (Head) with RSI failing to do the same showing a slowing of momentum.  Today also saw a close below  the 10 and 20 EMA.  We have some big news ahead of us tomorrow and Friday.  Will this market finally see a correction? or will new highs be made again?