A recent article in Forbes drew attention of traders to big inflows into the ETF known as Proshares Ultrashort 20+ Year Treasury (TBT). Donning my Elliott Wave hat, I took a quick look at the chart, and some interesting patterns showed up.
Take a look at this first chart where I have posted Elliott Wave labels for you. Observe that we have probably posted a 3rd wave low at $56.32 back in July last year. The sideways movement since than is typical of a 4th wave.
How far can this 4th wave travel? Typically, Elliott Wave analysts do some Fibonacci Ratio computations to help answer this question. Even a modest 23.6% retracement of the prior 3rd wave will take this ETF near the $100 level. It is usually a good idea to start with a more modest target, and build on any position as the market moves in our direction.
In this second chart, you can see that I am assuming we have recently commenced the 'C' wave of a second set of ABC. This is the most conservative way of labeling the chart, and it gives us a target initially of around $71.40 and later on above $74. We will revisit this ETF once we reach these targets.
By the way, did you notice that BestBuy (BBY) closed above $20 last Friday? This was identified using Elliott Waves a couple of months ago in this Forbes article.
About Me: I am a treasury manager and Elliott Wave specialist with nearly 30 years of market experience. I have worked with traders, hedge fund managers and extremely wealthy individuals. I have also written an immensely popular book on Elliott Waves, “Five Waves to Financial Freedom.”
