30 Year Bond Comes into Confluence Support

Apr 27, 2009: 2:12 PM CST

The 30-year Treasury Bond ($USB) has reached a confluence support level at $115.  Let’s see the daily structure and observe a possible Elliott Wave count – all of which has bullish implications going forward if we can hold support here.

30 Year Bond Price daily chart

(click for full-size image)

The 30-year Treasury Bond has been flirting with the $124 support level since February, as price has formed a lengthy rectangle consolidation.

The main takeaway is that we have confluence support at $124 thanks to the rising 200 day SMA, 50 week EMA (at $124.05 – not shown), and the 61.8% Fibonacci retracement of the October to December rally.

Does that guarantee support will hold?  No, but with the confluence at that level, odds favor it will.

Also, notice that we have a possible Elliott Wave A-B-C correction completing into this level of confluence support, with the final “C” Wave subdividing into a mini-5 wave affair.

Keep watching these levels very closely, as a breakdown here would trigger selling (rising yields) as buyers would be forced to bail out of positions and we could see a momentum move down if these support levels here fail to hold.

Corey Rosenbloom, CMT
Afraid to Trade.com

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