Elliott Wave Analysis of the 30-yr T-Bonds (ZB futures contract) by Sid from ElliottWavePredictions.com. Click on the chart twice to enlarge.

The sideways choppy price action in bonds since September 23 appears to possibly have been carving out a triangle, which may now be near completion. Triangles are followed by an aggressive thrust, and the estimated distance that the thrust will travel is one of the very handy tools that Elliott Wave analysis provides. If the interpretation shown in the attached chart is complete, bonds yields are very close to breaking out to the downside aggressively, (bond prices will thrust upwards), which indicates the possibility of some sort of “event” triggering fear in the markets. The most imminent negative event in my opinion is that the haircut Greece is forcing on its bond holders will finally and correctly be ruled as a default, although escalation of an Iran/Israel/oil conflict is also a near-term possibility. Or, the wave 5 could simply accompany the long awaited correction in equities. The substantial strengthening of the US Dollar today, which I believe will continue for many weeks by the way, may have given an early tip-off . .

BTW, I’ve placed invalidation of the triangle at the extreme of wave A, just in case wave C of the triangle is still underway. If the triangle is invalidated with downward movement below the extreme of wave A, I still don’t see a plausible way to interpret the downward movement since Sept 23 as anything but corrective, so a final wave 5 to the upside will continue to be my expection, triangle invalidation or not.

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Sid
http://elliottwavepre.wpengine.com