U.S. Treasuries may be at target levels but look for reversal pattern to get bullish on bonds again

U.S. Treasuries dug deeper into the symmetry target levels I've discussed in numerous prior posts here (check the "Bonds" label for prior posts on this topic). Below are charts for TLT, UST and USB. The daily charts for TLT and USB suggest a possible little ending wedge into these lows, but even if that's right then I don't think it looks completed yet. So use trendlines on intraday charts, or a trend reversal pattern you're comfortable with, for verification if you're looking for a good-probability buy entry. The TLT chart is interesting where volume has spiked again on a down day - maybe it's capitulation, or maybe short-covering. Either way, it occurred with bullish divergence in the StochRSI. There's a bit of bullish divergence in some other areas of these charts too - just remember that divergence signals a reversal can be happening. It's the price pattern that will trace out a reversal setup when it's ready.

Given that the 50 day moving average has crossed under the 200 day moving average, we cannot really be confident that bonds do anything more than a bear-market rally after a buy pattern setup. Still, a rally such as a 38% or 50% retracement to the highs can be a good long trade (and for anyone shorting bonds, would represent giving back much more of their gains than they should want to part with).

I made a remark about a wedge. What I'm really getting at is that the pattern looks to me like it still needs a small 4th wave pullback and 5th wave down, in order to finish the Elliott Wave pattern on the drop into the lows. That's why I will not be very surprised if bonds probe a bit lower. In that case, bonds may require several days to a week in order to put the finishing touches on that. Unless you're daytrading bonds, I recommend just waiting for the standard swing trade trigger with a movement above the prior day's high and look for a pattern followthrough to confirm bonds are a buy again. The main point of posting this is to point out that bonds finally are looking close to being ready for that process to begin.