While the chances of the 30-year bond making a new all-time are real, the odds favor a downside brea...
Bonds Turn Higher, but Ultimate High Is In
01/07/2020 9:16 am EST
Bond are due a rally but October all-time high should hold, writes Al Brooks.
The 30-year U.S. Treasury Bond futures are reversing up from the bottom of a four-month trading range. Any reversal up will probably be minor and last two to three weeks.
The 30-year Treasury bond futures formed an outside up bar last week (see chart). There is now a double bottom with the Nov. 7 low. In addition, last week’s low is the third leg down in a truncated wedge bull flag. The first two lows were Sept. 13 and Nov. 7. Traders should expect higher prices over the next couple of weeks.
The first target is the Dec. 3 lower high. If the bulls break above that, then the Oct. 11 and August highs are the next magnets. But, because of the 10-year nested wedge top on the monthly chart, the odds are against a big breakout above the Oct. 11 all-time high. The trend over the next 10 years is down, even if there is one more brief new high.
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