Make This 1 Trade Now as Inflation Still Runs Hot

December U.S. Treasury note (ZNZ26) futures present a selling opportunity on fresh price weakness.

See on the daily bar chart for December U.S. T-Note futures that prices are in a sideways trading range at lower levels, not far above the recent contract low. The bears have the overall near-term technical advantage.

Fundamentally, the Federal Reserve is reluctant to raise U.S. interest rates with inflation running well above the Fed’s target range of around 2% annually. Still-elevated crude oil (CBV26) prices are also keeping inflation at higher levels.

A move in December T-Note futures below chart support at the contract low of 107.22.5 would become a selling opportunity. The downside price objective would be 105.000, or below. Technical resistance, for which to place a protective buy stop just above, is located at the August high of 108.27.5.

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. 

On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.