10-year note futures: technical indicators supportive, potential toward 122-00 - BBH

In respect to 10-year note futures, analysts at Brown Brothers Harriman explained that the Buying to cover shorts is different than buying to go long.   

Key Quotes:

"And that is what has happened."

"The gross speculative short position peaked in the middle of February at roughly 955.6k contracts. It fell 59.6k contracts in the latest reporting week, which ended February 20. So, in the two weeks, that the net short position fell by 133 k contracts, the gross short position has fallen by about 43k contracts."
   
"Over the past two weeks, the gross long position has increased by nearly 70k contracts and by more than 120k contracts since early January.  Bottom pickers are emerging faster than the shorts are covering."
    
"We suggested that the near-term technical outlook for the 10-year note futures is constructive. The March contract has built a base near 120-00.  Initial resistance seen near 121-00 was tested today. The 20-day moving average there as well (120-30) and there has not been a close above it since the middle of December. The technical indicators are supportive and there looks to be near-term potential toward 122-00."