Sunday night crude oil futures traded as low as 89.41 after closing on Friday at 96.60. They are back around 92.75 now but was still enough of a break from last week that treasuries opened this morning with bullish gaps.
At the low yields on Friday, they were all trading in the gaps they'd left on the 15th, but none of the gaps even came close to being filled and with this morning's openings, we're looking at bullish 6-day island reversals.
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On Friday I wrote, "my preferred target ranges for where the 4th wave corrective recoveries should end, presuming that's what we're seeing, are 4.162/124 for the 5-year, 4.514/461 for the 10-year, and 5.065/035 for the 30-year. If any of those target ranges are overcome, then for other wave-based reasons the rallies from Tuesday would appear not to be 4th wave corrections".
At this morning's openings 5-year and 10-year yields were within those target ranges, but the 30-year yield was beyond its target range and while I find that market to be the least reliable when it comes to wave patterns, let's just say the short-term bearish patterns are being stressed.
While the daily chart of the 5-year looked worrisome after Friday, the 10-year and especially the 30-year charts looked much better, and the weekly charts finished with bullish key reversals, the 30-year from its highest yield since 2007, while the 5-year also finished with a nearly perfect weekly Doji, having opened last Monday at 4.258 and closing on Friday at 4.256 despite a 15 bp range.
For me, the short-term call from here is very difficult, but I still view the moves up in yields as being large degree B-waves with ultimate targets near 5% for the 5-year and the 10-year and reversals this week from my original target ranges for the 5's and 10's are still very real possibilities, I wouldn't even rule out reversals occurring today.
One last thing of note is that for the past week or so Fed Fund futures have been suggesting that there would be no change in rates by the Fed this year or next, and that's the case this morning, but on Friday they favored a rate change in December of nest year by 42% to 32%, and the change was expected to be a rate increase.
