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U.S. Long Bond: Let’s Review the “Upward Point of Exhaustion”

Here’s an update on the trend of 30-year U.S. Treasuries since the historic early March price moves

by Bob Stokes
Updated: June 09, 2020

Back in early March, the behavior of the bond market was reminiscent of what unfolded during the depths of the 2007-2009 financial crisis.

Prices and yields were making major moves in a short period of time.

On March 5, the U.S. Treasury long bond closed at 173^30.0. The very next day, on March 6, the long bond rallied to 180^19.0, a whopping 6+point move, reaching a new all-time high.

But the rally had more to go.

On March 9, our U.S Short Term Update showed this chart and said:

march-full

The moves in bond prices and yields are historic. The yield on 30-year US T-bonds dropped to 0.6987% intraday. At the close, 30-year yields barely had a 1% handle. The [U.S. Treasury long bond] spiked to 191^22.0 and the DSI Indicator (trade-futures.com) is at 98% bond bulls. Prices surged through the... trendline but then pulled back to close right on it. Might this be the point of upward exhaustion?

As it turned out, on that very day, U.S. long bond prices did reach "the point of upward exhaustion."

Here's what's happened since. This chart is from our June 5 U.S. Short Term Update, which noted that March 9 high and said:

june-full

[U.S. Treasury long bond futures] are working their way down.... Market moves are never a straight line, but the decline is developing impulsively.

Many investors "diversify" into bonds to shield themselves from the volatility of the stock market.

However, market participants can lose just as big in the bond market.

Our U.S. Short Term Update identifies price targets, which are in accordance with the long bond's Elliott wave structure.

Those wave labels and price targets are available for your review when you take advantage of our 30-day, risk-free trial.

Follow the link below to get started.

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