Treasury bonds may strengthen again

Treasury bonds may strengthen again, with commensurate lower rates again, especially if equities weaken significantly. A move like that could accompany a move up in VIX as well, of course.

For the moment, bonds found support at the Elliott Wave internal 4th wave of the wave up from November (a support area I marked with two horizontal blue lines, and pointed out a couple of days ago here). TLT also may be gaining support from the lower Bollinger Band, especially since this was the first move down against it after its sharp rise pushing up the upper Bollinger Band and then waterfall drop through the BB midline. I'm currently looking for either a bounce up, or a final slightly new high (esp. if equities drop). Don't get me wrong - in either case, I'm subsequently looking for that to be followed by another movement down in bond prices and up in rates.

IF there's a slight new high, that would also satisfy the long-term Fibonacci objective I've charted and mentioned here for the 10-year Treasury (approximately $130.67-$130.77).


This possibility of a bounce or rally in Treasury bonds will be taken out, of course, if price moves under the up-trendline and the identified support area (around 109-112 in TLT).