Short Term Trading Member Forum

[techcharter]

Bonds come up for air

It looks like the next move for bond prices will be down. The chart shows two distinct waves to the downside. They could be waves 1 and 3 since today's rally did not overlap wave 2.

The first retracement was 50% of the wave falling from the 111-120 area.

Or they could be even more bearish wave 1 larger and wave 1 of an extendeing wave three. The motive waves are about the same length of $1.375. The rally after the morning gap down retraced nearly 38.2% of the wave 1 of wave 3 extending falling from the 110-240 area.

The retracements are imbalanced. The first one took longer to complete and retraced more of the prior wave than the second one. You would almost expect that with wave 2s of different degree.

These are some really solid fibonacci ratios in the bonds.

http://charts.barchart.com/chart.asp?sym=TYU4&data=Z15&date=071804&den=HIGH&evnt=off....


Three things are holding back the bond selloff:

1.) The 50 Day moving avg in the yield chart is immediate resistance.
2.) Upper bollinger band in the yield chart is immediate resistance.
3.) Stochastics indicate the yield is nearly overbought levels and is due to consolidate.

The yield poked above both at the opening, but closed below both. More testing may be going one the next day or two.

THe alternative bullish wave count is a zigzag with another test of highs. This is low probability, since the retest of the 200 DMA failed miserably.


http://stockcharts.com/def/servlet/SC.web?c=$tnx,uu[w,a]dacayyay[db][pd20,2!b50][vc60][iLp14,3,3!La1....