Equities rally keeps us guessing on a wedge as Treasury bonds skate close to the edge

Some Elliott Wave technicians are analyzing the equities indices to see if they can find an EDT wedge, which would place a bearish structure on this continuation move up. I've been trying that too, but losing some confidence that it's the right wave structure. Time will tell of course. But today's higher rise suggests to me either there's no wedge, or maybe I was "counting" it wrong (maybe that's it!). Candidly, an ending wedge would be unlikely if the market is going to continue higher into May/August. We do have our old "string" levels working within out general strategy though! We're looking for higher into Wednesday, maybe Friday/Monday, with projections around the 1160 area. Maybe we get a low tomorrow for another nice ride for short-term swing traders. Meanwhile, position investors are starting to lighten up, which contributes to the chop.

Many large funds also make investment changes mid-January, too, also contributing to some of the cross-currents now appearing.

And then there are Treasury bonds, which fell along with VIX and the dollar (and UNG, strangely). I'm thinking the VIX is a buy very soon, also the dollar. But not convinced about bonds or TLT. Maybe there's a spec buy with stop at the prior lows, or maybe it even cuts under those and then does a quick rebound before sinking lower. The dance is now increasingly about debt interest rates. Move them too high, people get rattled, the Fed has to tighten, the dollar strengthens, and equities should falter. We actually think that's the theme for this year, when the time is right. Will that time be starting soon? Or can the markets put a good scare on about this, then rebound back for the expected May/August "bonus round"?

That's what people should really start wondering about over the next several weeks. For now - bonds are skating close to that edge. And probably just days away from at least starting to push under that edge. Unless the bond market can pull some trick (like a large triangle?! hmmmm!) in order to levitate Treasury bond prices higher for some months longer. Don't let the gyrations of the next several trading days distract you from this difficult dilemma overhanging the financial markets.