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To the Elliot students on the list
Please comment of the Bonds
As I am looking at the bond chart I am concerned about the possibility of a
correction in the bond chart which could hurt the S&P market.
We appear to be following an upwardly trending short term channell for the
last 12 days. this appears to be at the upper end of the short term channel
and also to be heading towards completion of 5 waves up in the 12 day pattern.
This appear to be the second impuse wave in the pattern from 111.31 in
August. It is also the second impulse wave from the low at 106.12 in
February. I would like to see the short term pattern complete a full 3
impulse wave rise to the major "double top"? at 122. This would make the
full rise from February into a neat A-B-C in a B wave top for the Bonds.
On a swing target I see a swing up to 122.13 if we have the same length
swing that we had from 106.17 to 116.31. This would also place we directly
in the middle of the long term overhead resistance from December 1995.
On the other hand, we are sitting just above the .618 swing target at 119.
It looks like we have reached this target after two impluse waves in the
current campaign. A retracment at this time would have to hold above 118.18
without poking back into the 1st short term impulse terretory. This appears
very close. The Elliot theory of alternation would look for a flat
correction because the first correction was sharp.
As I see it, this pattern appears very dangerous, for a Bond drop or failure
now that we are pushing bond highs could easily tank the S&P market. With
the recent announcement that the japanese government will not support the
bankrupt banks in Japan, could this be the trigger that will start the
dumping of U.S. Stocks on the world market? Or will this possible
fundamental wait for the market to make a double top at 122?
Have stocks advanced to the place where they are now leading the bond
market, with the stocks setting up to lead the bonds down now that the Feds
have committed themselves to manipulating the markets with easy money in
order to hold up the U.S. markets in the face of an ongoing world recession?
If the bonds drop into a correction in the next few days will this allow the
stocks to break down, then the Feds support bonds up to 122 in an effort to
hold up stocks. Then the stocks and foreign fundamentals win at 122 to
break the bond market when the currencies dump the U.S. dollar as stocks
fall in the U.S.?
The question for the day?
What are the bond traders doing with other indicators at this time. Do you
have any strong bond short signals at this time?
What are your opinions on the strong showing in the Swiss Franc and German
Mark? Do the currency traders anticipate strong bull European moves or are
you trading the currencies short?
I would enjoy any comments by traders viewing the interactions between
bonds, currencies and the stocks.
Thanks for your interest
Tex
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