Timing The Bond Market With Elliott And Fibonacci by Roger Farley
Fibonacci ratio analysis offers the Treasury bond trader an excellent long-term picture of the market. A rudimentary understanding of the Elliott wave theory and Fibonacci retracements allows bond traders of any outlook an excellent projection of market objectives and turning points.
Obviously, this approach relies on maintaining a proper wave count. Technicians who have developed a reliance on other trading tools often shy away from the Elliott wave because of the subtleties involved in interpreting corrections. As with any other approach, however, a focus on the overall picture sorts out
some of those complexities.
According to Elliott wave theory, the first, third and fifth waves are proportional by the 1 to 1.618 to 1 ratio. The bond market demonstrates this ratio to a remarkable degree in the move from its August 1989 high of 101.08 to the May 1990 low of 88.07.