Category Archives: T-Bonds

10-Year T-Notes 1998-2017 Review

In general, when any bond declines in price, the rates go up. Government paper works on what they call the 10-Year T-Notes. Did this party end in late 2012, or are we still faced with a record move to the upside?  This bull market has been going on since 1982 from an inverted Cycle degree wave 3 base, and technically should end with a Cycle degree 4th wave top.  The entire bull market is a very messy pattern as it is next to impossible to find any decent or high quality 5 wave impulse sequences. Stocks are heading down in a potential 4th wave decline, so in that respect we want to keep our options open.

Investors can still seek refuge in T-Notes when carnage hits the stock markets. Long term this Cycle degree 4th wave rally should get completely retraced, but that could still take years before we will know for sure. Following the 2000 bottom, T-notes developed a typical diagonal wave structure which is a challenge to count out at anytime.

T-Bonds 1981-2016 Review

If we start back in 1981 we can see that T-Bonds started a rally that carried on for 35 years until it popped in 2016.  The first thing we see in this bull market are massive price swings in both directions. The waves in this bull market constantly overlap at critical times, which doesn’t allow clean impulse waves to form, except for very small degree sequences. 

These are not impulse waves, but you could force them into a 5th wave bull market. I counted the entire bull market as a Cycle degree 4th wave, which means that T-Bonds were in a huge 35 year bear market rally. This is about as close to a Fibonacci 34 years as we can get, and the only question is if the bonds are still going to add one more leg up?

Recent fundamental news had traders create a sell off, as the government drags its heels on tax reform.  As bonds decline this will keep the pressure on rates to go up.  Governments can only change rates when market forces allow them to do it.  We can already see that with the crash of the Fed Fund rates. 

Our present rally was also very choppy so that increases the odds of another leg down and not up.  At present, any rally was very choppy so the pressure could be for bonds to head down as well. 

In the long run, the wave pattern would be a 5th wave decline, so we have to wait and see, if the decline will be a better formed diagonal. Technically speaking, we should get 5 waves down in Primary degree, which is the opposite of the Primary degree 5 wave bull market I anticipate in the general stock markets. 

T-Bonds Intraday Bull Market Review

T-Bonds have been on a run that sure looks like it can fit into an impulse wave, but in the last 4 days or so T-Bonds have started to correct.  This June contract is also in its dying days as the next chart will have to be the September contract month. 

I will keep my commentary on the short side, but only posted it as impulse waves can be very exciting to work on and they sure give us an experience, in counting out 5 waves sequences.   What we don’t know for sure, is if we will get a new record high, sometime in our future.  I have already spent well over a decade trying to decipher the 35 year bull market and the one conclusion I have come to, is that we are wasting our time if we don’t understand diagonal wave counting.

This chart is only a very small portion of what can be an impulse. Yes the T-Bonds have recently spiked again, but we may not be finished our present correction just yet.  

T-Bonds Intraday Bull Market Update

The very big bull market in T-Bonds have been in progress since the bottom in 1981. Then in mid 2016 the T-bond bull market took a big hit and crashed down into the March 2017 bottom. This mid 2016 top, terminated close to a 35 year bull market, which is about as close to a Fibonacci 34 years as we can get. 

The “B” wave bottom is in Minor degree, so technically we would need to get 5 waves up in Minute degree.   The April 2017 peak is just too small to be in a Minute degree wave 1 already, so the above wave count is adjusted down by one degree. It also means that I’m scraping the bottom of the degree list, as I used up parts of Minscule degree, which is the last on the list of 15 that is used in the EWP book. 

After we have used up all the degree levels, and still get far too many waves, then chances are high my degrees were too low to start with.   There is a good chance that this bullish run can go to new record highs, but T-Bonds may have an alternate idea in where they want to go to.

This entire chart can also fit into a “C’ wave bull market, but as part of an expanded 4th wave rally.  We still have a long way to go  before we even get close to this potential “C” wave top. Once a 5 wave sequence starts, nothing will derail this 5 wave run until it shows itself with any and all extensions. Of course, any bullish phase can be a big bearish rally, in which the big bull market ends up dying and another major leg down materializes. 

I see the entire T-Bond bull market as a potential Cycle degree 4th wave, with the “AB3” wave in Primary degree already completed. The two sets of 5 waves, can only be calculated looking at the 35 year pattern as two diagonal waves. Pure impulse waves are next to impossible to see and count out, so this is a pretty good indication that the T-Bond market contains diagonal wave structures.  Diagonals belong to the 5 wave family of patterns, so by themselves they can never be used as a single correction. 

T-Bonds Weekly Chart: Head&Shoulder Review

It seems that I have been working on the T-Bond bull market off and on for decades, but the 35 year bull market was so choppy that impulse waves were next to impossible to find. It wasn’t until about 2013 that I started to focus on looking at the markets from a diagonal perspective. 

 Good impulse waves are next to impossible to find, in a diagonal bull market, but yet many experts count them like impulse waves.  They should be counted like zigzags connected together, with the ABC1, ABC2, ABC3, ABC4 and ABC5  labels. A diagonal sequence belongs to the 5 wave impulse sequence, and in the book they call it an ending diagonal. Triangles can act just like diagonals as well, but that still  may be much harder to confirm at this stage. I’m pretty sure that the T-Bond bull market is a Cycle degree, but at this time it is unclear if this was a triangle 4th wave rally or a 5th wave diagonal rally. Both options are just about always open. 

T-Bonds are sitting right at a H&S pattern, and they have started to rally. This bond top, sure looks like there is a potential expanded flat hiding in plain sight, and that the May crash bottom is just the start of a “C” wave bull market phase in Minor degree.

All I would have to do is drop the Minute degree start, down one degree level, and nothing else would need to be changed. Any potential start sure has been looking like pretty good impulse waves, so that would mean most all the other waves will follow along, until we run into 5th waves. This “C” wave sure would be a nice refresher for a change.

I labeled the potential peak above the new record high, but it can go much further  as “C” waves in a zigzags can stretch far out of proportion. Nothing is even in the waves of the real world, and the 1929-1932 crash is a clear example of how zigzags can get bent out of shape. 

The T-Bond bull market may not have died in 2016, and exploring the options would be the smart thing to do.  Either way a new record high would have to be achieved in the longer term. Short term we need 5 waves up in Minute degree, so we have a long  way to go before it is completed. 

T-Bonds Intraday Bullish Review

For the last few days I have been looking at the huge T-Bond bull market which started way back in 1981. It was a bull market that was so choppy, that it can only work as a diagonal wave structure. In mid 2016 this huge bull market came to an abrupt halt, and then proceeded to crash. Bonds have been in a rally, which had a potential wave 1 top in Minute degree, and then crashed which sure counts out as a zigzag.  This zigzag crash gives us a clue that this T-Bond market will retrace all of wave 2. 

Following the wave 2 bottom, it sure looks like another impulse wave has started which could be in a 4th wave correction.  We still would need to add on a 5th wave. This 5th wave could extend, but would have to end on another wave 1 peak.  I can spend days on the big bull market and still not come up with a viable large degree wave count. I have to hunt up a very big historical chart,  as going back 36 years just doesn’t cut it.  

T-Bonds Intraday Crash Review: Potential Mini Bear Trap?



I like to have the time to read the COT reports on the weekends, and I look for the very skewed set of numbers, between the speculators and the commercial players. Extreme differences have not really been that obvious, but the next best thing is when partial numbers look just as good. Scanning anything related to bonds, I saw all commercial positions were net long, with the speculators doing the exact opposite. Not by a huge margin, but enough that a bigger rally, may already be in progress.

At the very top, it also looks like an expanded pattern may have developed, which would turn my wave 1 bottom into a 4th wave bottom.  At the very least,  this potential bullish phase should clear all peaks presently showing.  Of course, if the expanded pattern is real, then T-Bonds could see a new all time record high. 

Since the early 1980’s the entire T-Bond bullish phase has contained a plethora of choppy wave structures, which I can only interpret as being a huge bear market rally.  Even the Fed Fund rates are crashing which they seemed to do, well before stock market bottoms. 

I’m not an expert on anything to do with the Fed fund rates, but I’m sure they will turn once we see a bottom in the stock market. Most of the time the Fed fund rates, just sit there doing very little or nothing at all. This makes watching their charts about as boring as watching paint dry. 

Any new record high might be a long shot, which would also force a new location for a Cycle degree wave 4 top.  

Market Vane reports can support a bullish phase, but not any super bullish phase lasting many years. 

One other COT set of numbers I noticed were that the commercial traders, are now net short most of the big markets, which was not the case for a very long time. This all helps to support the bearish case regarding the stock markets.  When the commercial’s shift again and become net long, then chances are good that the stock market may have hit a temporary bottom. 

T-Bond Crash Continues, Intraday Review



Since T-Bonds are still pointing down, or bearish I thought I would take a look at the intraday scale.  I don’t have the time that is required to create a better wave count, but hopefully it will make sense on the weekly chart scale.  It sure looks like T-Bonds crossed to a new low with a 3 wave pattern, which can make this a potential expanded pattern.

It’s a toss up as this would also work as a diagonal 5th wave. From an expanded pattern perspective T-Bonds could soar much more, especially if some traffic comes from the stock markets.  At this time, T-Bonds (TLT)  could have finished a major bull market top just before the Trump election. If this is true, then no amount of destruction in the stock markets, will push T-Bonds to new record highs. 

Once any new trend is established, then no amount of  fundamental news can lift T-Bond prices for very long.  In this case there is always a bit of doubt since the T-Bond bull market had been going since 1982 or so.

T-Bonds would have a very long bear market, but by 2021 it may be ready to reverse once more.  At this time I’m looking for a zigzag crash in Primary degree, and if I think there may be a dramatic alternate to show up, I will adjust it when we get close.  In a big potential bear market all the rallies are wild reversals,  producing choppy and overlapping wave structures. 

Another full moon kicked in yesterday, so maybe T-Bonds like to rally with the full moon. These types of connections have to be back tested or tracked going forward, before there can be any reliability to them. 

T-Bond 34 year Bull Market Review: Another “D” wave Top?




When we look back to 1982  where this T-Bond bull market started, then we have close to a 34 year bull market already completed.  In reality the majority call it a bull market,  but when we take a critical look at the patterns of the last 34 years, then we can’t find a single set of 5 waves that I can call a pure impulse.  Some come close, but they are only seen in very small degree levels.

I had the entire bull market as a potential 4th wave top in Cycle degree, but this leaves the question of what type of a decline we could expect. Either way they were all very bullish on T-Bonds before the election.

There were so many areas that waves overlapped, which still looks like a big zigzag,  but I dropped down all the degree levels down by one degree.  Any “D” wave will work just like a 4th wave can, so using a “D” wave top can hold for a long time.  A “D” wave Primary Degree top would match the US dollar and Nikkei “D” wave tops of the same degree. When we have a choppy bull market like the T-Bonds had, then this is a sign of a market running against a bigger bearish trend. Depending on the degree, I would always expect a complete retracement of any “D” wave bull market.  The EWP book makes it very clear that large degree “D” waves are  bull traps.

A complete retracement would bring the T-Bonds down to the $55 price level, and if this ends up becoming true, then rates will be going up in the future.  Any “D” wave top is followed by an “E” wave decline, which should at least resemble another zigzag in Intermediate degree.  Any 3 wave decline in T-Bonds, would also match a potential 3 wave decline in the stock markets.

 I’m sure we will see some safe-haven seeking, bond buyers create T-Bond rallies, but any rally will not last, until we get close to an “A” wave bottom in Intermediate degree.  With a potential “E” wave decline, then we should see no more T-Bond record highs, but record lows would be created instead. 

T-Bond Crash Review: Correction Or A Counter Rally?




We have all heard about the big Trump induced bond crash, but he is going to get blamed for everything, why not this T-Bond crash as well?  Many are calling for a rally as they say this is overdone. If we call this a correction, then, those that do, are still on the bullish bandwagon. If this is the real case, then these US Treasuray Bond Futures, must break out and break a new record high. On the flip side, if this crash is just the beginning of a much bigger bear market, then we can only get another counter rally.  Looking at this from a potential counter rally move, is what I’m looking for, in the coming weeks or months ahead. 

I will try and be more consistent in my descriptions, so when I talk about a correction, then my bigger outlook will be bullish,  but when I use the wording, “counter rally”,  then my larger degree outlook is still bearish.

It is not economic rocket science to know that when bonds crash, they produce higher rates in the market place. We can see the effects of higher rates already, as many are calling for a rate hike. Only time will tell us more, but if we are right with the bigger picture, then any anticipated counter rally will run out of steam, and then resume its real trend. After all, a starting set of 5 waves down, can point us in the direction of a new trend.