The ‘b of (b)’ in bonds is still developing as bonds were unable to break under the daily moving averages early last week. The overall plan is to get a choppy retrace from the high early in January to next month or early April before advancing again into July for a wave [ii].
When I last posted a UNG chart about two weeks ago, my assumption was that a wave iv bounce was forming against 30.08. As it turns out, that resist was not challenged again and prices have continued to fall. That said, I think it might be jumping the gun to say that UNG is now down in ‘v of (iv)’ though that is the alternate. The primary I am running with is that this drop is ‘[B] of iv’ and due soon for a move up in ‘[C] of iv’. Targets for iv are at 26.71 and 29.13. As for timing, beginning to mid April looks appealing for the ‘v of (v)’ low. Weekly and daily charts below.
A case can be made that bonds have completed ‘b of (b)’ and now ready to decline in ‘c of (b)’.
Bonds are about halfway in the development of a (b) wave down from the (a) wave high at the start of the year. I expect (b) to be a complex choppy formation. In the short term bonds can trade a little lower but overall thinking somewhat sideways into mid February.
Monday is a US holiday thus will not post in the morning though will post daily charts in the late afternoon/early evening. Also had a request to follow natural gas again which I will do, posting on it once a month.
The fast dominant cycle is at a crest in weekly bonds and prices have been attempting to reject 148^31 for the last two weeks. I can’t say it is impossible to retest resist but provisionally calling wave (a) up complete. Next support is at 143^30. I think the next major timing in bonds will be in the summer around July or August so prefer to see several months of choppy movement lower followed by a summer rally to complete (c) of [ii].
Bonds tested a Gann related resist this week at 148^31 when both weekly and daily cycles suggest a cycle high making it a candidate for the (a) high that I have been looking for. If wave (a) is in, the retrace in (b) should take the form of a choppy three wave move over the next few months.
Monday has an early close and Tuesday is closed for the holiday. Imagine that volume is thin till the first full week in January as many take time off till then.
The defining item this week will be the FOMC statement and press conference on Wednesday as traders look for clues of a halt to the rate hikes in 2019.