Bond Market Highlight #4
Lowest bond market price of the first quarter, 1998 anticipated in early March.
(COMMENT #s 156 [#3], 161)
UPDATED 19980303
COMMENT 1998-156 [#3]
3. Today is the 34th trading day (FIBONACCI # = 34) and 48th calendar day (LUCAS # = 47) since the 980112 all-time market top in the bonds. If we are to begin the final leg up, this is an ideal time from which to begin the advance. If such occurs, we will likely look back and note that the initial decline from 980112 high to the 980126 low (basis overnight prices) required 9 trading days as did the 980218 high to the 980303 low (today) at 11908 (so far). 153/32nds versus 114/32nds (assuming this morning's low of 11908 holds). 153 : 114 = 1.342 (4/3 = 1.333). Using daily prices, 135 : 114 = 1.184 (4th RT of 2 = 1.189). The market appears to have unfolded in an "a-b-c" Elliott Wave pattern since the January high with the "b" wave correcting approximately .618 of the day session January high to January low. The ratio of the "b" wave to the "a" and "c" waves in time (basis trading days) is 1.778 (RT 3 = 1.732). Make the market show you strength, however, for it would not be surprising to see the market PANIC to the downside from here. Market participants were flabbergasted at the 1 and 6/32nd runup from Friday's low to Friday's high projected in COMMENT #146. The peak occurred at 12027 in the overnight market Sunday evening instead of early Monday morning as anticipated and did not quite make the 12031 projected high but was quite close. This move completed the "c" wave projected in COMMENT #146 from which we have subsequently collapsed. Keep in mind, they've got the bulls trapped. Many can't accept the fact that the bonds can decline when we've a budget surplus, inflation's low, Goldilocks is alive, and so on. Doesn't matter. If you're positioned wrong, the market will go to where it has to go to force you out. By the way, even if you missed Friday's run up and the short reversal position, you still should have put the bond's and note's margin requirement in your pocket given the decline of the last 9 trading days (see COMMENT #s 70 and 100).
UPDATED 19980304
COMMENT 1998-161
1. In the bonds, the market is attempting to hold the information cited in COMMENT #156, 3., and the major up trendline drawn off the April and August lows in the spot futures market.
2. This trendline was at approximately 11905 today.
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