T-Bond

Although the post-Halloween rally failed by inches to surpass early August's 153^05 peak, it handily surpassed several others, attesting to the robust health of the long-term bull market. The correction begun in June could nonetheless continue for a while longer, but we should continue in any case to watch for the bull's resurgence, which would be signaled most obviously by a two-day close above the p midpoint of the pattern shown.  (Please note that that p could migrate lower if the futures dip beneath the current point C at 149^23.)

A series of lower highs and lows since July lends weight to the possibiity that a major top is in.  Although we can look for further corroboration in the lesser charts, or alternatively for signs of a bullish turn, the daily chart (see inset) should be our standard.  In that regard, only an unpaused upthrust exceeding at least two of the three prior peaks ahown would qualify as a game-changer. Accordingly, we can set a screen alert at 151^30, just above peak #2, to tell us if bulls have sprung back to life. Click here for a free trial subscription that will allow you to follow Rick's Picks' trading recommendations in real time.

Friday's avalanche stopped a single tick shy of the 144^15 target I'd flagged here earlier. The possibility that the long bull market is over is growing, but we should reserve judgment until we've seen how much support, if any, the futures pick up at 144^15. If they instead continue to fall without an upward 'b-c' pause, breaching the small 'external' low at 143^00 recorded on May 10, that would provide further evidence that bears will remain in charge, at least for the intermediate term (i.e., about 3-5 weeks in this case).  There will be double support down near 143 since, as you can see, an alternative 'D' target sits at 143^03. Alternatively, it would take a print at 147^24 for bulls to turn things around even moderately on the hourly chart.

T-Bond futures are at key threshold after breaking down in mid-August. A strong rally has ensued, creating a 'duel' on the daily chart between bulls and bears that currently favors the latter. That would change, however, if buyers get traction at or above the 148^03 midpoint support shown in the chart.  This may be occurring now, but it would take a further rally above  early August's 153^05 peak to make it official.  Traders can use camouflage to get long by leveraging a pullback from 1-3 ticks above  149^28.  An external peak at that price can be found on the 10-minute chart (September 7, 1:20 p.m.  EDT).  _______ UPDATE (11:22 a.m. EDT):  The futures have broken down this morning with a decisive breach of the 148^03 Hidden Pivot support flagged above. This strengthens the evidence that a 30-year bull market has ended.  Next stop below:  144^15.

Treasury bond futures are targeting an important support level at a time when many traders are watching for the final top of the long bull market.  The sharp bond selloff of July 27 completed an impressive impulse wave down from an all-time high, and subsequent trading gives us a 'D' target of 148^6.  Important prior lows in the range from 148 down to 146 constitute a support zone whose breach might signal that the bull-market top is in.  Traders expecting the support to hold can look to get long near the 'D' target or to buy the bond ETF with ticker TLT around the 125.49 level.  (Posted by Doug “harry” McLagan)

Bears refreshed the impulsiveness of the hourly chart within the space of Wednesday's steep decline, but considering how far T-Bond futures had come in recent weeks, a further correction down to the consolidation zone near 147 would hardly be out of line.  In the meantime, the September contract is a speculative buy for night owls who are camouflage-equipped, since the futures were noodling around near the D target of the pattern shown, as though fixing to disabuse shorts of the notion that profits would come easy in the wake of the recent run-up.

The markets were in the throes of tedium when we looked in on them this morning, affording us an opportunity to ponder a bigger picture than usual in some key vehicles that we track. T-Bond futures, for one. The Rick’s Picks forecast has been extremely bullish, for reasons that leap from the weekly chart to the eye. Yields on 30-year Treasurys could go below 2.5% if the futures contract fulfills its technical destiny. Gold, on the other hand, could fall all the way to $1400 on completion of a clear ABCD correction pattern from last summer’s high. This session is an eye-opener and a must-see for traders and investors concerned about the long-term trend.

I'm now projecting a minimum 147^27, based on a rally pattern that has a quite few things going for it. For one, the point 'B' high narrowly exceeded February's 143^01 peak, legitimizing the impulse leg;  for two, the B-C pullback is sufficient to have recharged the futures for a successful thrust to 'D'; and for three, the 'A' I've used is nicely one-off.  Getting aboard for the last piece of the ride will be catch-as-catch-can, preferably via camouflage, but shorts can use a 147^26 offer and a three-tick stop-loss (although camouflage is again the preferred way to initiate the trade).

Yesterday's thrust tore through a 142^21 midpoint resistance with such ferocity that further progress to the 'D' target associated with that number, 144^06, is all but a foregone conclusion. With yields on the 30-year now at 3.06%, one more strong push is going to send them below the magical 3% barrier.  Who needs QE3 when the demand for U.S. debt is insatiable?  Please note that we'll be using the weekly chart to project targets above 144^06 and that the next would lie at exactly 146^04.