CLIFF NOTES: target hit on the long bond, last target hit on TBT, RYJUX hitting some key support. No doubt the move up from the neckline and multi month consolidation is a big deal and now we’ll see if the neckline is attacked as we are suggesting. Note, it already came down and bounced off the neckline for a very nice LONG Bond opportunity. W/ this many patterns completing there is, of course 1 of 2 things that are going to occur … THEY WORK or DO NOT WORK.
CLIFF NOTES 2: we showed this chart before but note the FRACTAL that was present in the LONG BOND is EXACTLY the same as 10/1987. Not making any crazy crash forecasts just bringing it up that the PATTERN was EXACT.
bonds sold off hard on Friday and what could be the start of another leg down.
let me digress for a bit .. I LOVE Elliot Wave – when it’s easy to count. LOL – no kidding if you can pay attention to corrections and their form (flats, zig zags, triangles, expanded flats, double threes, etc) and live by the rules (3 can’t be shortest, 2 can’t go above/below the beginning of 1, 4 can’t go past the end of 1) you can get kind of dangerous at it. when I try to force a count it’s probably correcting or “the grid is shifting” and the count will, ultimately come to me. so, am I on a 5 minute chart counting every squiggle? nope … however, I do look for counts on monthly and weekly charts.
back to fixed income … if we look at the low in the summer of 2009 we’ll see the next leg up on bonds (the last?) start in earnest. Wave 1 peaks out and, as you can see, I have labeled to areas where 1 might have finished. then we go down into 2 and then this is where it gets interesting … if we make (1) = 3 then the correction BLOWS THRU 1 and we have broke our rule so we have to sub-divide and then NICELY count (1), (2), (3), (4),(5) into the all time high and that high becomes 3. for me, it’s the only way that I can count it and NOT break rules.
w/ that in mind, we see a 3 wave move down (a) and then a 3 wave movement up (b) and now we are rolling in a pretty devastating C wave…the “internals” of this C wave are very nice in that 3 was exactly 1.618 of 1 and IF 5=1 we land right on the top of the wave 1 that began the move in 2009 and it also equals the MAX/EXTREME corrective move that has ever occurred in this 30+ year move…IF that level holds and we start going up then, we might be up to another high. Sounds crazy but that is what the chart is telling us w/ regard to “one more high”
here is the bearish count – note the entire 2 was a flat type of correction and therefore, you “could” fit this one into the picture….either way, we are on the right side of the market and I feel pretty certain that we’ll target that long standing trend line at 127-128 (red line) and/or the 124 level. I expect rates to rise accordingly as this target area is attacked. Stay tuned …