Why It’s Crunch Time For Bonds

  • September 15, 2003
  • Derrick Hobbs

The
December US 30 Year Treasury contract (US03Z) is bumping up against a
giant wall of Fibonacci price resistance levels. This “zone” is from 108 ½ to
111 ¼ .

Against this resistance zone
there are two items that throw up the red flag that this contract has a good
chance of reversing back into its downtrend:


  1. Time Cycles    :
    There are six time cycles pointing to a potential downside reversal this week
    from the 15th thru the 19th.


  2. Bearish Pattern    : The pattern outlined in red is a
    Bearish Butterfly pattern. In the new CD-Rom that I’m wrapping up, I discuss
    situations where these patterns are “ideal”. One of those ideal situations is
    when you get a Bearish Pattern within a downtrend. Bonds are definitely in a
    downtrend at this point from a daily-chart perspective and this pattern is
    complete. It’s a big zone, so wait for your trigger to enter a trade on the
    short side.


image src=”https://tradingmarkets.com/media/2003/Derrik/dh091503-01.gif” width=”532″ height=”622″ />

Have a great night!


Derrik Hobbs