Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Bond Market in a Free Fall, Price Action Signaling Low May Be Near

Bond Market in a Free Fall, Price Action Signaling Low May Be Near

Paul Robinson, Strategist

Bond Market Highlights:

  • 10s and 30s are tanking, with the long bond showing the most amount of stress
  • The orderly decline is beginning to look disorderly and on that a low could be near

USD Forecast
USD Forecast
Recommended by Paul Robinson
Get Your Free USD Forecast
Get My Guide

We have seen the dollar’s rise turn into a consolidation (it may break out, but for reasons to be discussed it may soon fail), stocks have rebounded and show some signs of stabilizing, but the bond market continues to fall. Hard. The selling has been orderly for the most part, but with the decline really deepening there are signs that the market is capitulating.

So far this week the selling has been the heaviest one week stretch since this leg lower began in early August, and is on pace for the worst week since Covid hit. To me this shows that the market is finally giving up and this is a good thing for creating a low.

I’m not an ‘Elliot wave guy’, but when a clear trend sequence develops I take note. Since the sell-off began after the capitulation top surrounding Covid, by my count we have seen three impulse waves and two corrective. If this is the case then the capitulation episode we are seeing is consistent with the end of the third impulse and should bring a meaningful low soon that will stick for awhile.

I don’t think it will be the low in bonds, but a tradeable one that leads to a corrective rally. A low in bonds would bring some rate relief and signal that the dollar will decline and stocks will recover for a bit. Perhaps into the new year.

The 4-hr chart of the 30-yr ultra has a very clean trend structure to it with the lower side of the channel having been broken as of yesterday. This is where orderly is becoming disorderly. We saw a sharp turn a month ago not long after the underside slope was broken. This time we may see more of an extension first before a low if this is going to be a more significant low.

Tactically, buying bonds here is a bit like catching falling knives, but not the worst idea. However, it may be prudent to take a wait-and-see approach. If we are to see an intermediate-term low form then there will be time later to establish a wager on lower yields. A sudden and sharp turn higher will be the first signpost, then recapturing that channel and breaking out of the other side will add confirmation that a broader rally is underway.

Futures for Beginners
Futures for Beginners
Recommended by Paul Robinson
Futures for Beginners
Get My Guide

30-yr Ultra Bonds (UB1!) Weekly Chart

30-yr Ultra Bonds (UB1!) 4-hr Chart

A picture containing diagram  Description automatically generated

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.