Tag Archives: Elliott Wave T-Bonds

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.