Few markets have enjoyed the extended bull runs U.S. treasury futures have enjoyed in recent years, and the spike they experienced in 2008 as the financial panic unfolded was spectacular.

Treasuries have long been favorites of traders as well as investors because of their liquidity and relative stability (compared to say, stock-index futures). As a result, pullback- buying strategies have been staples of system designers and vendors, but because no trend can last forever, traders should keep short-side setups in mind to take advantage of any extended corrections, reversals, or long-term downtrends.

Let’s look at some basic patterns for trading short-term swings on both sides of the market.