July 4, 2023

Eye of the Storm Podcast – Big Picture Technical Update – U.S. Treasuries

The U.S. Treasuries have been very difficult to analyze as well as trade the past couple of months.  Mainly due to the increasing narrative around where interest rates would be headed over the near term.  The conversations swirled around a pause in hiking to rates being eased. There were/are a myriad of reasons being listed to support either and all sides of the argument.  This produced a very confusing picture for the 30 year bond, and the 10, 5, and 2 year notes.  On an Elliott Wave basis the counts were straddling larger countertrend rallies in bond prices and lower rates to larger declines in bond prices with higher rates.

Currently, though, I have hopefully have regained control of the EW counts that again are in sync with each other in terms of bond durations.  The narrative has also simmered down somewhat after the June Fed decision to pause hikes but make more firm that there will be at least an additional 2 rate hikes before the end of 2023.

With all of the above in mind I present an updated big picture update for U.S. Treasuries.