Mid-day update on why US Treasury bonds can still be bullish

The markings on this chart should help you see why US Treasury bonds, measured by the ETF called TLT, can't be called as having reversed trend to the downside - yet.

We can probably use the 112/113 level as the place where TLT needs to remain above for the bullish case. Clearly it needs to vault above the 200-hour moving average which is around 116 now.



The reference on the chart to "EW" means Elliott Wave. You can see that after the waterfall drop, there was what looks like a triangle (could be a truncated diagonal triangle from the drop). Then the rise since then can be considered an expanding leading diagonal, and the drop this morning did not go under the internal 4th wave of that structure.

I don't deny there may be other counts, but when you look at the indicators, some are saying that bonds may continue to frustrate shorts for now. For example, the Slow Stochastics on that special setting looks like it's a 50 midline test, from which it remains possible for price to rebound (especially while the on balance volume (OBV) remains above its 30-hour moving average).

So - be careful out there, and happy Friday everyone!

**11:50 am (ET) update:

BKX new low; VIX rebound up from its 13-day EMA - can also be supportive to bonds in the near term: