Elliott Wave Analysis of U.S. Treasury 30 Year Bonds

Interest-Rates / US Bonds Jun 24, 2012 - 08:06 AM GMT

Best Financial Markets Analysis Article Having finally reached a long standing target of 148-150 (the call was made back when the media and many commentators were proclaiming the US bond market was dead near 135 this year).

Bonds have come roaring back to burn the bears for the umpteenth time over the past 3 or so years.

Timing is everything as many have found out, if you time the markets wrong and sell the lows when most are bearish, you end up being on the wrong side of squeeze.

I am surprised the bears have any fur left, with the butchery that has gone on over the last few months.

I personally still don't think the US Bond market is ready to roll over just yet, but having finally met my projections, I am happy to recommend getting short if price evidence suggests it.

But from the March 2012 lows, I don't think the move is completed, as any Elliott Wave enthusiast knows, you need a 5 wave completed wave for an impulse wave, its generally seen that the 3rd wave is the extended move so we require to see a 9 wave advance.

Currently I can count the move as a 7 wave advance.

Using TLT, we can see that we have a 7 wave move, and from the highs, the decline is somewhat choppy, so I don't have any reason to declare the bond market is dead, the bond bull is alive and well atm.

In fact whilst TLT hovers around the 122-124 area, I suspect it sets up for a strong move above 130, and the TYX sees new lows potentially yields around 2.4%.

ZB should hold support around 14630 -- 14530.

When you look at the RSI on the actual ZB chart, you can see that it only supports 8 possible moves, so we should see a push higher, I suspect to new high around 155+ and the RSI will diverge and create a 5th wave divergence against the 3rd wave.

TLT

So looking ahead, I either want to see price a breakdown and confirm bearish price action or a new highs in TLT and ZB over the coming weeks/months.

Until next time.

Have a profitable week ahead.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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