Looking at the chart, I see a clear A-B-C decline from the December 2008 high. In June the bond bottomed at around 111.50 and the uptrend has been resuming. The decline stopped at right about the 38.2 percent retracement of the long-running advance from June 2007. Additionally, wave C of the ABC was approximately 127.2% of wave A. I think these lend credibility to the option that wave “4” of the 10 year’s advance may have bottomed. The only problem with this theory was the slow advance from the June bottom. I would expect the bond to start making some serious upward movement, breaking throught the trend channel created by connecting the June and August lows. (See Next Chart)
Daily 10 Year Trend Channel
If it doesn’t move out of the channel soon and the downward move continues, then the bond may be making a more complex correction and need to move downward to around the 108 level. Today’s upward action is close to confirming this, but I am looking for more follow through. Again, I watch and wait but to me the upward trend seems likely and a run up to above the March high of 123 is in store.
