Fibonacci Confluence in 10 Year Note Price

Feb 23, 2009: 11:03 AM CST

Let’s take a weekly look at the 10-Year Treasury Note Price and highlight an interesting Fibonacci Confluence Cluster price and note the recent action taking place.

US 10-Year Treasury Notes (Price):


(You’ll need to click on the image for large chart)

Price broke out of a lengthy downward sloping trendline (actually trend channel) in late 2007 and then broke out again in late 2008.  Price made a new high near $130 and has been in a retracement against the sharp run-up in prices at the end of last year.

Where might prices find possible support?

The first logical place would be the prior swing high at $122 (possible Elliott Wave 1) but price has already slightly breached that level, though it may yet prove to be support.

Another ‘hidden’ zone may come in at around $119, which represents a Fibonacci Confluence Cluster price off of two retracements to swing lows (look closely at the chart to find where the Fibonacci grids were drawn).

The Momentum Oscillator registered a major new momentum high in late 2008, hinting towards the possibility that higher prices are yet to come, perhaps in an Elliott 5th wave to challenge or exceed the $130 price high.

The moving averages are in the most bullish orientation possible and price is currently trading above all three, meaning we could also expect potential support on pullbacks to the rising 20 (or perhaps 50) weekly EMAs.

Continue to watch Bond and Note prices, and expect potential strength here should the US Stock Market falter to new lows.

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Corey Rosenbloom
Afraid to Trade.com

6 Comments

6 Responses to “Fibonacci Confluence in 10 Year Note Price”

  1. Reggie Perrin Says:

    this of course is the year of the false move

    the fun wd start if the support fails (as the oil/commodities did last year) …serious stops etc

  2. Corey Rosenbloom Says:

    Absolutely right. Interesting times we’re in currently.

    I would have expected bonds to surge all throughout 2008 but they were really flat until the last 2 months when they skyrocketed.

    There’s a lot of support underneath, but that in no way means support *has* to hold.

  3. Don Da Mon Says:

    I’ve been watching the 10 year T yield closely. Remember the FED is planning on purchasing Treasuries if the yield goes up too high. Bill Gross from PIMCO states that he expected that the FED might start buying when the yeild reached 3%. When they start buying it will be a “big day” in the stock market and good for currencies. It reached 3% a week or so ago, but this was right before a treasury auction. With the drop in the stock market, some have jumped into treasuries bringing the yield down.
    So with all of that information , can you see this price staying flat for a while?

  4. piazzi Says:

    Hi Corey,

    great work, the way you have labeled, if you are counting the latest run as a probable wave 3, the correction has already overlapped top of wave 1, that is only allowed in diagonals, and by the sharp rise of the advance, a diagonal is a bit unlikely. Unless you are counting the advance as a wave 1 of a lesser degree.

    my best, as always,

    piazzi
    markettime.blog@gmail.com

  5. Corey Rosenbloom Says:

    Don,

    There really are a lot of cross-currents that are making intermarket analysis difficult right now, so adding additional layers adds to the complexity of the balance.

    I think the name of the game now is risk-control and logically placed stops so that if your analysis is wrong, you’ll stand to limit losses quickly and then profit from gains when correct.

  6. Corey Rosenbloom Says:

    Piazzi,

    I left the Elliott count up for a bit of interpretation, not officially labeling the (3) or (4) waves. I think we could indeed be in a Wave 3 that is sub-dividing at the moment, but that 1 and 2 have perhaps set-in.

    It’s altogether possible that we’ve just seen a massive ABC Corrective phase up against the prior downtrend as well.

    We did get such a steep move up recently.