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10 Year US Notes Are Trapped in A Bullish Consolidation – Elliott wave analysis

10-year US notes fell sharply last week, which allowed stocks to move higher as yields rose. Technically speaking, this drop in 10 years should not be any big deal, or trend changer, as it appears to be just another leg within a complex correction that is underway since March. We are tracking an A-B-C-D-E triangle, currently with price positioned in sub-wave C which will usually move for 61.8% compared to the distance of wave A. In that same zone we also see the 78.6% Fib. the ratio of wave B, so it can be an interesting short-term support level down around 135’00. That said, maybe wave C is already looking for support, but based on Elliott Wave guidelines, lower prices would be reasonable, before the market turns up for wave D. Regarding the bigger picture, this move since March is the fourth wave, meaning that when correction is fully complete, a new rise into wave 5) will show up, but it may not happen so soon.  

10-year US note 4h

A Triangle is a common 5-wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to E, and from waves, B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

Triangles can occur in wave 4, wave B, wave X position, or in some very rare cases also in wave Y of a combination.

An example of an Elliott wave triangle pattern:

To learn about the Elliott wave theory, and my trading approaching check the video below. It also contains some added, free analysis.

Trade well!

Gregor Horvat

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!