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Category Archives: Bonds

T-Bonds Daily Chart Bull Market Update.

 

This is just a quick update as this T-Bond chart is off and running on another bullish phase that should produce a new record high in an ongoing  37 year bull market. This bull market will not end folks as it could be on a Supercycle degree wave 3 that is far from finished. Heck if we’re lucky a wave 1 in Cycle degree is still ahead of us. Checking the T-Bonds and commercial traders positions show they are mostly all net long. This helps me to turn bullish on these T-Bond Charts. Even today we had a small spike develop, which should turn into another correction.

Hits: 5

T-Note Weekly Chart Update

 

Waiting for the Fed to see what it is going to do seems to be the favorite pastime for Fed watchers.  They may still raise rates but at the same time, they can also “Pop” the market bubble top.  What we have is a potential completed zigzag, which means this is a correction in a 37-year bull market. Even after the Fed does serious damage, and starts dropping rates, that will be no guarantee that the market even cares. They dropped rates during the 2008 crash many times and the markets ignored all of them.

Rates are dropping already as demand for loans are drying up! T-Bonds are in a bull market that will push to new world record highs, which looks like we could be heading to a Cycle degree wave 1 Peak.  This could take years to play out but a big correction may have nothing to do with the Fed as market forces can force T-Bond prices to fluctuate wildly.

In order for this to get confirmed as a correction then T-Bonds must soar to new highs eventually.

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T-Bond Bullish Review!

So far the October low in T-Bonds has held and T-Bonds have been in a bullish rally since. We also have a higher low which is also a very bullish sign.  The Fed is already making it very clear that a “Pause” in rate hikes is coming in 2019! Rate hikes have drained the markets of liquidity and are killing the stock market bull run at the same time.

https://www.bloomberg.com/news/articles/2018-11-16/fed-rate-pause-possible-in-2019-as-powell-highlights-headwinds

The Fed may not talk about the falling stock market, but it will do everything in its power to stop the markets from imploding.  China has also made it pretty clear that they will do everything in their power to save their stock markets from crashing. This is nothing new, but dropping rates in the 2007-2009 crash pushed stocks lower, as investors just wanted out at that time, and I’m sure this will happen again as T-Bonds can keep right on soaring.

I may have to change my bottom wave count in the future, but for now, a bullish phase is what I’m looking at. I want to see more evidence this T-Bond rally is serious, as diagonal runs look and even act like bear market rallies. TLT touched a new record low and it has started to rally as well.

T-Bonds have been in a bull market since 1981 and T-Bonds have a 120-Year cycle to them that can also divide into 60-year cycles as they did from 1861 to 1981. When bonds rise in price then this takes the pressure off the Fed to keep raising rates.

Hits: 5

2-Year T-Note Weekly Chart Bearish Review

 

This is the 2-year T-Note crash and is the driver of any rate increase that the Fed may still implement. The Fed may start to pause, or start giving the impression it might slow down in increasing the rates.  Higher rates are not designed to take liquidity from the markets, but in the end, that is exactly what is happening.  Who wants to jump into real estate when the majority can no longer afford to take out a loan, or their wages can no longer keep up. Slowly squeezing the lifeblood out of the markets has been happening since the 2000 peaks and they start to drop rates once the markets have obviously started to pop!

We can see how the Death Cross on the weekly chart forecast a major decline, and once this chart starts to reverse, then a Golden Cross will happen.  This could still take months but it is something to watch for.

Virtually every T-Note related COT report shows that the commercials are extremely bullish and this 2-Year T-Note report shows how bullish they really are. This COT report will change as we head from one extreme and then reverse back to another extreme.

Hits: 9

T-Bonds 1981-2016 Review

 

This is the December T-Bond chart showing the bull market that started in 1981 and has churned its way up until 2016 about 37 years later.  2016 was the bottom of Intermediate degree 4th wave  correction bottom in stocks. TLT has already pushed lower, so that instantly calls for looking into an alternate position.  1981 was also the bottom of a 120-year bear market, which I think is wave 2 in SC degree and that another 120-year bullish phase is in effect. Corrections and crashes are thrown in to keep all the analysts guessing. Two parallel lines, one to highlight the support trendline,  and the other to show the trend across the tops.

There is no way of really knowing if Cycle degree wave 1 has completed, but I’m sure this crash would not be enough. T-Bonds are a diagonal type of a bull market which all commodities run under!

The commercials did add to the short positions last week, which pushed TLT to a new low. T-Bonds still have to follow TLT and this may clear up once all the midterm election results are digested later tonight.

As we can see T-Bond crashes in the past have been dramatic like in the 1998-1999 crash. Not a single crash since 1981 was followed by a bear market as the crashes recovered and then continued to new record highs. I expect about the same this time but where we are in this potential Cycle degree peak is still uncertain. In the long run, rising rates are not good for the gold price as investors get a return in T-Bonds but gold only goes up or down. Look what happened to gold in 1980 which produced a bear market that never ended until 1999!

I may change this big count back to 5 waves in Primary degree, but at this time I will keep this zigzag going.

 

 

Hits: 6

T-Bonds Intraday Bullish Review

 

T-Bonds hit a bottom Oct, 9th and since then has been producing higher lows. Longer term I’m very bullish on T-Bonds, but T-Bonds contain diagonals that are very difficult to tell if the trend will continue. I started this bullish wave count with very small degree waves and will build on that until a wave 1 in Minor degree comes to an end. T-Bonds have a long records going back to 1861, which took 120 years to correct, into the 1981 bottom. T-Bonds produced another major peak on July 11, 2016, after which it crashed again, ending this October.

I sure would like to see more bullish action as that would take the pressure off raising rates. I will keep this brief as anything can still happen in the short term, and we need more time and distance to be confident enough to have a real bottom.

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T-Bonds Bull Market Update

 

 

You may be hearing about US treasuries being dumped or sold off, but when the bearish news is rampant, and more rate increases seem imminent, then the markets do the exact opposite and reverse their trends. The bull market has reversed after every major crash or correction since 1981 and I’m sure it’s doing it again. T-Bonds hit a bottom on Oct, 9th at the 136.500 price level, and so far it’s still holding.  It’s not about rates rising that is killing the “T-Bonds”, but it’s the falling T-Bond prices that forces or allows the Fed to increase rates. The Fed is basing all rate increases on lagging indicators and if I’m right then sooner or later they will have to “pause”.

Since the 2000 crash bottom, we have had a solid bull market with some wild and crazy overlapping wave structures. “All” commodities can create these choppy waves, and that has been going on since the Little Ice Age bottom in 1500 CME.  T-Bonds are on a Supercycle degree wave 3 rally that has 120-year cycles to them. From the 1861 peak, T-Bonds took 120 years to complete a zigzag correction, and I’m sure the next real bullish phase top will not happen until 2101! 2041 would be a 60-year top and my Supercycle degree wave 3 peak. Of course, I can never confirm that as that would be a job for a very young analyst to do.

Two years and 6 months with well over 1 million page views, not a single budding wave analyst has expressed any interest in switching to Cycle degree wave analysis. With this lack of interest, chances are good I may shut down this blog permanently once solar cycle #25 starts to crank up in 2022.

Hits: 7

T-Bonds December Intraday Chart: Potential Bottom?

 

 

Shortly after I posted the big T-Bond chart, the T-Bond market at the intraday scale hit a bottom. Of course, that could be just luck, but T-Bonds produced a very bullish pattern because a set of 5 waves started to form.  It can still be a fake bottom, but that should clear up this week if possible.   The news changed quickly as they are saying the “pressure” to keep rates moving higher, was eased!  I do not fill out all the little micro moves, as that’s for people that have nothing else better to do.  If we can count all the little waves, then how come we can’t see a bull market coming?

This morning confirmed the correction, but in order for it to remain true, T-Bonds must not produce another bear market low.  President Trump is already giving the Fed the gears, so the in-fighting has become pretty clear to me.  Every Fed has done this in the past, which has always popped any bubble,  going on at that time. If this specific correction doesn’t hold, then there will be another, as T-Bonds are in a bull market, not a bear market like the majority think!

All the Commercial reports regarding Bonds show bullish commitments. Bearish wave counts will always fail if we keep ignoring the COT reports, or if we have bearish wave counts, along with every other T-Bond bear!  I will keep this short, as gold and gold stocks could also go much lower.

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T-Bonds Bull Market Supercycle Degree Update!

 

Here is a cute little chart that shows the dynamics that goes on when we look at bonds. It is a bit of a chicken and egg story in which comes first. I also flip this saying around, “When Bond Prices Fall, Interest Rates Rise”.

The Fed can only raise rates in what the bond market and the 30-Day Fed fund rate allows them to do. The Fed runs on fundamental data, which I know are always lagging indicators. I for one do not believe in rates getting out of control, as the FED is always fighting the wrong battle at the wrong times.

The future threat is “deflation” folks, not inflation. If you don’t believe that just yet, then I beg you to spend the entire day searching the internet with, ” 10,000 Boomers retiring every day for the next 19 years”. Economists, climate change models, and investors are ignoring this biggest demographic shift in history! This has been going on since 2011 and will continue until about 2030.

This demographic shift has huge implications for all types of real estate investments, or static investments like gold and silver. Below is the monthly T-Bond chart price that hit a 120-year low in 1981. It has been bullish through all types of crashes and bear markets since then.

I tried the 1981 bottom position in GSC degree, but GSC degree has too many time forecast loopholes in it, so I dropped down one degree to a Supercycle degree wave 2. 5 waves up in Cycle degree is what we are looking at, and wave 1 in Cycle degree has not arrived yet.

I was suspicious about the T-Bond top containing an expanded pattern, which means the asset class in question, should make another new record bull market high. When we add 120 years ( 4, 30-year cycles) to the 1981 bottom we get the year 2101, which is my Submillennium degree wave 3 peak!

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T-Bond Wave Counting Example From March, 1980!

Digging around the Internet for big historical charts, I found this very interesting T-Bond wave count. I don’t know who the author was but that’s how everything was counted like in those days. In those days it was just before the end of the T-Bond crash, and to top it off, he was seeing 5 waves down in Primary degree. I had no problems in deciphering his degree list as it looks like it came from an “old school” degree list. 38 years later I have the same 5 waves down in Primary degree. The only difference is that the “b, c” in Cycle degree should be switched around. The “b” wave in Cycle degree should be at the top.

If I had to assemble a crew of wave analysts, I would hire him on the spot. I sure can’t say that about any wave analysts today. I never had decent charts until well into the early 1990’s as all I had was a Text-based internet.

T-Bonds came to a 120-year bear market bottom in 1981, which I see as a wave 2 in Supercycle degree. All my large degree analytical Elliott Wave work is done off-line with big print-outs. 38 years later I end up confirming in what he thinks he is seeing.

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A Look At The 30-Day Fund Rate!

 

I found my own chart on the internet from March 2018 highlighting all the flat or horizontal moves. The horizontal moves are when the FED halts or rests from raising rates.  The fed can only raise rates when the Fed-Fund rate allows them to do it. EWI has conducted studies that show exactly that.

The chart above is heading to support trend line, and it also has a couple of huge gaps, that can work as major support before this chart trend will reverse itself.

 

This is our recent 30-day Fed Fund rate, and it suffered another mini-crash to the downside. This trend will reverse itself, but I believe that the charts have to flatten out or go sideways for a certain period of time before the Fed-Fund rate on this chart starts to point up again.

Nothing I see supports any major inflationary run, as the commercials added to their bullish bond positions in a rather large move. I only see overwhelming odds that T-Bonds and all other associated 2-year, 10-year Treasury bills have huge long positions. I never argue about those kinds of odds, as being bearish on T-Bonds will be proven to be wrong in the long run!

It may take the rest of the year to see if the Fed pauses or follows through with another rate increase, but I would like to see this chart go flat!

Hits: 4

T-Bond Supercycle Degree Wave (III) 1981-2041

 

I have been working on T-Bonds, as there is a much bigger bull market here, that anyone would even dare suggest. I have a chart that starts in 1861 and T-Bonds crashed for 120 years in a spectacular giant zigzag, ending in 1981! Two-60 year moves made up the bear market with one bottom being in 1920!

I will drop the GSC degree T-bond analytics, and drop all my wave positions down by one degree. Can you imagine 5 waves up in Cycle degree? They will not end until SC degree wave 3 ends in 2041.

1981 is the big time period from where the time count, starts from, so 1981+30 years ± 1 year = 2011!  2011 is the year that stocks went on a rampage, and gold/gold stocks imploded.

I believe wave 1 in Cycle degree may still be ahead of us, but that will take work to confirm if wave one in Cycle degree has already completed. I may start SC degree T-Bonds as a separate page, as T-Bonds are directly related to interest rates.

At this time all my COT reports do not suggest any huge shifts, as commercials are net long across the majority of futures that are interest rate sensitive. The Fed is still fighting inflation, but that will end up in a bust.

 

 

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T-Bond Monthly Chart 1981-2018 Review

 

This is just a simple version, but we have to back to 1981 when this big bullish phase started. There is definitely a 60-year cycle to T-Bonds which is just 2, 30 cycles back to back. 1981+60 gets us to 2041, which is my SC degree wave 3 top as well. This bull market is far from over as there is no threat of inflation. All the commercial COT numbers show that they have net long positions in everything related to bonds. This does not support a bigger bearish phase at all. Even the 30-day Fed fund rate has been stagnating, showing that the Fed may be forced to pause or slow down the rate increases, and maybe even reverse.

I need lots of work to find a better fit, but a new bullish phase to new record high bond prices sure would help to confirm my bullish outlook.

Hits: 25

June, 1, 2018 10-Year T-Note Intraday Correction Update

This 10-Year T-Note chart has started to correct, or it sure looks like it. It’s very early in the stage but my bet is that the May 2018 low could be the bear market low. Since all bond futures tyepsare diagonals we should expect wild pattern that have little resemblance of a great looking impulse. T-Notes have retraced the previous declining 4th wave which was a Minute degree move, so Minute degree top is a logical choice at this time to work with. I may have to change it on a later date as we have a long way to go with a 5th wave in Intermedeate degree. I don’t believe the 10-Year T-Note bull market is finished as we should still be heading up to my Cycle degree wave 4 peak.

Be it a run to safety or any other reason, once a bullish phase starts nothing will kill it until it is ready to die. Many of the COT positions in bonds have to swing into the opposite direction before the bullish trend will end. No amount of fundamental BS will stop a bullish move, besides very few will remeber what made the T-Bond market turn in the first place. This bullish cycle should last as long as it takes for the stock market to hit a Cycle degree 4th wave bottom.

Many are still expecting a major decline with rising rates, but markets always do the opposite of what the majority thinks is going to happen.

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10-Year T-Note Intraday Rally Update

Since my last update the 10-Year T-Note traveled down a bit further and then started to reverse on May, 17.  I belive that this massive bull market in T-Notes has been running since the early 1980’s as an inverted Cycle degree 4th wave, and it’s still not finished.  All commodities show diagonal patterns for their entire Submillennium degree 5 wave sequence, so there is no way of getting away from counting diagonal patterns as conventional wave counting will not make any sense. This rally looks great, but it’s still very small and barely registers on any weekly chart.  Short term anything can still happen but hopefully, this rally has got some legs.

Market players could be running to T-Notes and cash as a place to hide from the potential bull market wreck in stocks.  In the long run another zigzag bull market with 3 waves in Minor degree can develop so we have to keep our mind open to this possiability all the time. The choice is simple enough if this bull market is not finished, as it must push to new record highs again. Mind you it may also take a few more years to play out.

 

Hits: 15

10-Year T-Note: Is It Time To Turn?

The news that Bonds, stocks and gold are falling at the same time is no surprise. I have been warning about this for sometime already, but when the media picks up on it, it already becomes old news.  My personal guideline is that when your friends start talking to you about this bond decline, then it’s already old news. News circles the world about as fast as the crowd can do the wave at your basic hockey game. Every major bond trader has that type of news high on their reading list.

Yes their may still be a bit more downside to come but it looks like it may have already turned. I’m not going to draw you a pretty arrow pointing up as I think my readers understand the basics of the idealized form.  I expect a full reversal as this 10-Year T-Note bull market is far from finished.

We are finishing a 4th wave correction in Intermediate degree with a Minor degree zigzag. The current commitment of traders bond postion has shifted to the long position by a huge amount. When commercial long prositions get this skewed then the 10-Year T-Note bear market is going to run into very stiff resistance where a bull market has the base to grow from.

Just to get warmed up complete 4th wave retracement will happen and eventually this T-Year T-Note chart will soar up and beyond the top of the chart.  Chances are extremely high that diagoanl wave structures will be the main theme with another potential zigzag we have to contend with.

I can’t always keep up with any intraday charts, but I will try and catch strong turnings as much as I can. Everybody is freaking out about much higher rates to come, but I don’t see it that way if this bond bearish phase was just a correction in a bigger bull market.

Bonds have been in a bull market since about 1982 with a Cycle degree wave 4 bull market. This bull market is not finished so one more extreme high should happen. I’m dealing with 30 Cycle degree 4th wave patterns, and I have many asset classes where I also have 4th wave declines in Intermediate and  Minor degree 4th waves.

The moves that force short players into a trap are the best reversals, as the power of the bulls will slice and dice all the bears betting on a continued decline.

Hits: 12

10-Year T-Note Intraday Update: The Crash Continues

This 10-Year T-Note bear market has now been going on since the 2012 peak, and it’s still not finished, just yet. I believe that T-Notes have been in a zigzag crash in an Intermediate degree 4th wave crash. To compound wave counts even more, we have to deal with all the diagonal wave patterns that are always present.  The April peak was my diagonal 4th wave peak, which was followed by a decline that is not an impulse at all but must be counted like a diagonal.

The first zigzag looking crash looks like a zigzag, but I was trying to force it into an Impulse which never worked. Once I applied my standard diagonal count down, then things started to fit much better.  All sorts of zigzags show up with the first one looking near perfect, but these zigzags stretch beyond anything ever described in the EWP.  From the wave “2” top in Minuette degree.  The wave 3 followed which also only contained “one” zigzag, with the “B” wave riding high in the wave 3 counter rally, followed by a long declining “C” wave stretching wildly in the process.

The reason for an extra explanation, is that the markets are full of these types of extended “C5” waves, especially when we are in a 5th wave as well. This is only one type of diagonal decline and probably one of the easiest to count out. From late April to our present May peak is another diagonal 4th wave rally, which must be followed with another zigzag in Minuette degree. This should take T-Notes to new record lows, but then smash into a 4th wave bottom in Intermediate degree (Red) In the next couple of years we should see the bulls return as there are just too many people forecasting rates to climb further.

On Current COT reports it shows the commercials in one second  highest long position in over a year. This does not support a huge bear market in bonds, but rather supports a bullish phase to come. Most other types of bonds are also in net long positions, so it’s not just one contraian reading, as there are 3 or 4 other types of bonds as well.

All the bearish wave counts in the world will get trashed if we think that the “Big One” is here!   The last bullish 5th wave in Intermediate degree should also represent a zigzag rally, but this could be so choppy, we will be convinced it’s not a bull market at all.

This decline could last until the end of May and until this bottoms, upward pressure on rates will remain.

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10-Year T-Notes 2000-2018 Cycle Degree Review

The media have gone wild in reporting the bond market crash. When I read about intense bearish news about any asset, I usually look at the bond charts to see what, if the asset class is ready to reverse and go the other way.  This 10-Year T-Note pattern is one of the wildest I have tried to count out. The reason for that is because this T-Note chart is part of a giant Cycle degree wave 4 rally, which is a big bear market rally still going on since about 1981 or about 37 years.

I am tracking this bond market for close to 20 years now, as this bond market pattern seems to have hit a peak back in 2012 and has now been in about a 5 year bearish trend as no new record highs have been recorded. I have mentioned it before in that I don’t believe that this bull market is over yet, and what we had is more like a zigzag correction as the wave 2 correction in Intermediate degree only fits best as a flat.  A flat in a diagonal bull market? Yes, I have no problem with that as waves 1-3-5 should mostly be zigzags.

The 4th wave has come back into the peak of wave 1 which instantly throws it out as a nice high quality impulse. Friday I saw the T-Notes started to rally so the bottom could be in already.  One COT report has the commercials carrying their biggest long positions in the last year, which does not support a basic bear market for very long.

If you think that 10-Year notes can’t rally, then look what happened after the 2000 crash bottom. A “B” wave bottom in Primary degree. T-Notes soared as the markets crashed, as investors searched for safe-havens.  It might take a few years or more, but we could still see a major rally for the next several more years. From the 2000 bottom to a potential 2021 peak would fit well into the time cycle. We are witnessing a big bond bear trap in the making and once the stops start getting hit, it could start to accelerate it’s really.

I could draw you a nice Intermediate degree falling wedge as well, which I use for ending bearish trends.  I don’t have the time to keep updating Intraday reports on this, but I will try to get important turnings before they start to happen. Drawing in wedges after they are done is kind of silly as anyone can see the angles after they have completed. The only good wedge is the one we see before it happens not after.

Since we would be in a diagonal 5th wave we should expect a zigzag in Minor degree.

If you see the dark red lines  on the right side of this chart, you are looking at the commercial traders long positions. The light Magenta color is the short positions of the speculators (expert fund managers) Both in opposing views. There is no way I can keep supporting a bearish outlook as this could all turn around and surprise the entire world! It might be slow at first, but it should pick up steam as the bullish phase returns.

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10-Year T-Notes Intraday Crash Update!

The crashing bond market is in the news, as the rally up to the April peak was super choppy, and then decided to pack it in and crash to new lows. I believe we are declining from a 4th wave in Minute degree.  Starting the decline it looked diagonally like right away, so instantly we have to look for the connecting zigzags to confirm it. There may still be a bit of a downside, but I would be expecting a correction of another 4th wave rally in Minute degree.

This rally can go sideways and force us to pull out our hair, or it can soar right back up to the top trend line in short order. Either way it will shut the Bond Bear’s mouth for awhile.   So far this diagonal decline tells us it is a 5th wave down, as it’s any 5th wave where they can show up most frequently.

This is a classic move and a very common diagonal, as they can get so choppy where this pattern is much harder to see. In a diagonal I like to see that waves 1,3 and 5 are zigzags, with wave 2 and 4 being any regular correction, even a triangle. A triangle in a diagonal 4th wave is a real mouth full, which can produce super choppy waves that will defy logic. 4th waves are also warning us that a higher degree is going to be terminated on the 5th wave, before this decline is finished.  All 5th waves must be capped, which should be followed by another much larger bullish move.

Investors might be running away from the safety of bonds, but they could also come running back with a vengeance. I’m not certain enough to call bonds with a Cycle degree 4 peak as finished yet, but any bond rally will help to take the pressure off the Fed, from having to keep on raising interest rates.

How rallies act is always important, as a choppy rally will tell us that it’s just a little bear rally!  It may take longer than the end of the month to play out, but any counter rally correction needs time to fully develop.

Hits: 5

30-Day Fed Fund Rate Review

I believe that the 30-day fed fund rate will determine any potential rate increases to come, and that the rates should go flat again in the future. We had flat bottoms and flat tops each time before rates reversed. Any flat bottom which represents a rate freeze for about a year or so preceded any  chart rise. A rise in the charts represents that lower rates are coming. This Wednesday another announcement is due so this is when this chart will move.

The Euro Dollar looks just like this chart except the pattern is more free flowing.  The commercial traders positions are net long/short neutral, with the 30-day rates but that can change fairly quickly.

The chart is about as interesting as watching paint dry so until a flat bottom shows up, rates could keep going up.

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30-Day Fed Fund Rate 1989-2017 Review

I have been looking at the 30-Day Fed Funds futures charts. Fed fund rate is the interest rate charged between banks and by the looks of the past pattern this rate has a huge impact on the stock market and gold. Years ago I saw a chart made by Elliott Wave International (EWI) and they simply said that the “fed” just follows the 30-Day Fed Funds rate. The Fed raises rates, when the 30-Day rate allows them to.

The top line at the 100 price level would represent the Fed is giving the money away, which technically should never happen. We can see that there are small sideways movements with some lasting a bit more than a year where they do nothing. This “do nothing” time period is the start of major reversals in monetary policy.  The patterns of the moves look very “square” or flat, opening small gaps along the way.

The bottom trend line is drawn to give us some perspective, but it does not mean that the rate increases will crash that far down.

I will be looking at and posting the Fed fund rate a bit more often, and one key thing to look for is when the Fed skips rate increases for 2-3 meetings and produce a flat bottom.

For the longest period of time of about 5-6 years the Fed did nothing but then started rate operations in 2015. Of course the stock market went wild and for a year the stock market didn’t like it.  By 2016 the markets soared again, but by late January 2018, investors had enough, and they proceeded to sell off as rates were not going down. I think these rate increase cycle will end, and the Fed will have to start easing again.

When that happens then the stock market could start to soar again. This is not going to happen overnight or next week, as I would like to see the commercial traders net long positions become biased to the long side.

In last week’s 30-Day COT report, the commercial traders  positions were about as net neutral as I have seen. (1:1) Until the commercials net long positions increase dramatically, the Fed rate increases should keep coming.  We don’t know if a flat bottom will form this time, but past bottoms suggests a flat bottom will form. If they do nothing for a year or more, then a reversal of rate policy should happen.

When we look at the Euro Dollar chart, it looks just like the 30-Day Fed fund rate. Commercials in the Euro Dollar have shifted into a net long position by a wide margin so they don’t think the rate increases will last for a long run.

There will be no Elliott Wave counts that I will produce with this Fed fund rate, because 100 is the glass ceiling of “zero percent”.  Think of it as a,  “bullet proof” glass ceiling!

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T-Notes Intraday Crash Update

This chart I show is at another very low point of T-Notes.  As long as these 10 Year T-Notes keep crashing chances are good that interest rates are going to keep going up.  The entire 10-Year T-Note bull market is a big diagonal bull market.  I’m pushing my luck if I think that we can hit a major bottom soon so these intraday wave counts can be off by a mile.

The media is freaking out about the bond crash so a reversal would be nice. This diagonal 4th wave bottom should produce 5 waves back up in Minor degree which can turn into a zigzag. They say that three more rate increases are coming this year, but they will only come if the free market allows them to do it.

The 30-day Fed Funds rate also controls what the Fed can do, or has to do. Commercials are net long the T-Notes but not by a large extreme. Even that can produce a short bear market rally that many may thing is heading back into a bull market.

The need for safety in T-Notes could also send T-Notes soaring so the investors that are dumping right now can flip on a dime and chase yet another bullish phase.  If this rally starts to distort too much or go sideways with a questionable pattern, then this big bearish move may not be finished.

 

When we look across the top we can see a big flat where they practically were giving the money away for close to 6-7 years. How deep this 30-Day fund rate can crash down to is just pure speculation at this time, but we could start to see a flat bottom form when it finishes  going down.

Setting any moving averages 90 and 30 days will show the “Death Crosses” and “Golden Crosses” sooner than later. The last “Death Cross” happen at the top about 2 years ago, so eventually we would have to see the “Golden Cross”, after this chart turns north again.

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10-Year T-Notes Crash Review

The fear of higher rates turns bullish stock investors into chickens. When bonds implode this sends interest rates skyward, which the Fed is powerless to stop. If Russia and China are dumping only higher rates might stem the tide. Due to the nature of the choppy decline, there is the strong possibility for this T-Bond chart to soar to new record highs one more time.

We are still a bit short of touching my invisible bottom trend line, so a bit more downside can still happen.

The entire T-Note bull market is an insane example of a diagonal wave structure. Longer term the entire bull market can get retraced which does not bode well for rates in the longer term.  Until this potential 4th wave bottom is cleared up a complete implosion of T-Bonds is not in the cards at this time.

Eventually T-Bonds will also hit a Cycle degree 4th wave peak, which would coincide well with the stock bottom in Cycle degree wave 4.

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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.

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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. 

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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.  

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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. 

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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. 

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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.  

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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. 

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