Rate Move Nears Equality

A brief look at 10-year Treasury Note rates shows two distinct channels. This is true whether the note futures or the rates are considered. A daily chart of the rates is below.

At this point, a Fibonacci ruler shows that the rate moves have approached equality, with C/3 = A/1. In Elliott Wave work, one commonly ascribes the faster move to the "acceleration channel". As long as prices remain in this channel, then one has more reason to lean towards the 3rd wave rather than the C wave interpretation.

However, rates have not yet come down to try touching the lower boundary of the acceleration channel yet. A key to a longer third wave would be how rates react there. At this point, the MACD is strongly positive, although the histogram diverges a bit. But, there is nothing yet except some overlaps to suggest that the move has given up at this location. Therefore, the labels A/1 are equivalent, as are C/3. Consider them only like the 5-3-5 labels they are so far.

One item of consideration is the relatively brief down wave for B/2. While the acceleration channel argues for a third wave, that brief down wave is somewhat of an offsetting factor. 

This is the second post this weekend, and if you have not read the first one yet, you might also like to read it.

Have an excellent rest of the weekend.

TraderJoe