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Potential Fake Head And Shoulders On The 10-Year T-Note

Published 12/12/2014, 02:00 AM
Updated 07/09/2023, 06:31 AM

US 10 Year

There’s no trading set-up I like more than a fake head and shoulders, and the 10-Year t-note just put a potential fake head and shoulders on its 5-minute chart.

The tell will be if the bounce off the red rising megaphone VWAP turns into a megaphone (green scenario). That would put a megaphone right shoulder on the potential head and shoulders, and a megaphone right shoulder usually leads to a higher high that will be the top before a significant correction.

If you see the megaphone complete and break out upwards, be sure to get long for the ride.

Update: Technically, there’s already a complete megaphone right shoulder on the 10-year (orange on chart below). This could just break out upwards and keep going. But SPDR Barclays High Yield Bond (ARCA:JNK) and ES make me think the 10-year right shoulder megaphone will keep megaphoning for a while.

10 Year

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