Pure Guesswork

Despite the constant and ubiquitous bearish commentary on yields the past few months, a weekly chart of the 30 Year Treasury Yield shows that the impulsive move up in long rates topped out in early February.

On this chart we can see an impulsive move working from a base formed from a high (4.08%) on October 28, 2010 and a low at 3.86% on November 3, 2010. The impulsive theoretical 2.618 Fibonacci target working from this base would be around 4.43%. The first wave up failed slightly below this target and briefly dipped below the top of the base on the last day of November. But the next day saw a strong move up again and by December 7 the 2.618 target had been achieved.

We saw consolidation around this level with occasional upward probes into the end of the year. Then, in the new year, a steady upward grind with a last impulsive move up in early February. The top came on February 9 right at the 4.236 Fibonacci extension.

Since that time, despite the onslaught of bond bearishness, the market has failed to show any momentum. Instead we retraced 50% of the upward impulsive move in yield.

The same pattern can be seen (inversely and not quite as neatly) in the long bond ETF, TLT.

The 50% retracement level of the impulsive move is right around 95.00.

This 50% level, both on the chart of 30 Year Yields and the TLT ETF, can be seen as a neckline on a possible head and shoulders pattern.

Shown on a daily chart, somewhere around 4.32%-4.33%.

And on the long bond ETF around 95.00.

Posted by Pure Guesswork at 10:25 AM | Permalink | TrackBacks (0)

30 minute charts:

Posted by Pure Guesswork at 8:56 AM | Permalink | TrackBacks (0)

Short term patterns each showing impulsive moves ending at a 4.236 Fibonacci target.

5 minute charts:

A wave:

Then a little later, the C wave. Same 4.236 ratio hit, this time exactly.

Posted by Pure Guesswork at 11:08 AM | Permalink | TrackBacks (0)

A quick update on a pattern noted yesterday.

The move down yesterday retraced 50% of the shorter time frame impulsive move.

Posted by Pure Guesswork at 8:23 AM | Permalink | TrackBacks (0)

Late Friday the EURUSD approached a confluence of Fibonacci targets--both long term and short term--at the close.

Looking at a 4 hour chart from late March:

A 2.618 Fibonacci extension of an alpha-beta base was met at 1.4248 on March 22. At the time, the possibility that the extension would continue to the next major target (4.236) was noted. The theoretical level for that target was 1.4484.

We achieved that on Friday.

Note that the initial 2.618 level provided some resistance and a subsequent sell off last Monday, but by Wednesday we were through it and it became support.

Then, looking at a shorter time frame chart from Friday (15 minutes), we see a lower order impulsive move from an alpha-beta base with an initial 2.618 extended target at 1.4403.

While the initial impulsive move ended there in the Asian morning session, it drifted higher through the European morning.

And then near the close of the NY session it spiked higher towards the 4.236 target--roughly the same as the longer term 4.236 target.

Both these patterns seem completed. Today has seen a lack of impetus for any further moves, despite the fact that sentiment in the market seems uniformly convinced that we are going higher.

Posted by Pure Guesswork at 8:55 AM | Permalink | TrackBacks (0)

Posted by Pure Guesswork at 7:55 AM | Permalink | TrackBacks (0)