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Fibonacci Numbers and Current Picture in U.S. Treasury Bonds

You can learn a lot about the trend when you apply Fibonacci proportions to market charts

by Bob Stokes
Updated: November 21, 2019

Decades of market observation shows that Elliott waves in financial markets are often related to each other via ratios in the Fibonacci sequence of numbers (0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144 and so on).

Sometimes, Fibonacci ratios help you set a price target. Other times, turning points occur when the relationship between two waves reaches a Fibonacci ratio.

A classic Elliott Wave Theorist once noted:

Fibonacci ratios are few. The only ratio which occurs often enough in markets to be of practical importance is 1.618. Of secondary importance are .50, 1.00 (equality), and 2.618, which are all ratios found in the Fibonacci sequence. The inverses of these ratios are alternate expressions of the same relationships.

Well, the inverse of 2.618 is .382.

With that in mind, take a look at this chart of U.S. Long Bond Futures from our Nov. 8 U.S. Short Term Update:

uslbf-1108

Here's what our chief market analyst said:

[U.S. Treasury long bond futures] declined to 155^26.0 yesterday morning (Nov. 7) and then bounced. Yesterday's low retraces .382 of [the prior big up wave] and meets the internal trendline, as shown on the active daily continuation contract. There could be a snapback bounce in the coming days.

Right on cue, the snapback unfolded.

Here's what the price pattern of U.S. Long Bond Futures looked like just ten days later. Our Nov. 18 U.S. Short Term Update showed this chart and noted that:

uslbf-1118

[U.S. Treasury long bond futures] rallied to 159^03.0 today.

That issue of the U.S. Short Term Update went on to put the upward price push into the larger Elliott wave trend context.

Learn what our chief market analyst has to say about the next big move in the U.S. bond market, risk-free. Look below to get started.

“Exciting Times in All Three Key Markets”

That’s the title of the just-published November 2019 Elliott Wave Theorist – those three markets are bonds, gold and stocks.

The new Theorist goes on to say, bonds and gold “have been following our scripts” and the next wave in stocks ‘is going to be some spectacle.”

Get the Theorist’s insights into bonds and gold – plus, learn why the next major price move in stocks is expected to be a sight to behold.

You can review the just-published Elliott Wave Theorist without any obligation for 30 days.