Weekly jobless claims were reported to be 205,000 vs the expected 215,000, the Philly Fed Manufacturing Index 18.1 vs the expected 8.3, so both were considerably market negative.

Treasuries had already opened with bearish gaps, the largest by the 5-year yield which began the day at its highest yield since 8/1, but even 30 minutes later the high yields for the day were those made at 8:31. The bearish gap openings didn't surprise me since treasuries finished yesterday under pressure, but seeing buying commence after bearish news makes you wonder, or at least it makes me wonder.

The 30-year filled its opening gap and was on its low yield for the day at 9:00.

Watching the initial reaction to yesterday's FOMC news reminded me of how happy I was that I'm a technician and don't need to make sense of what I see.

With crude oil prices spiking and inflation worries abounding, and with the FOMC Statement including a line which read, "The implications of developments in the Middle East for the U.S. economy are uncertain." The immediate impact on treasuries was that they rallied 2-3 bps.

Wait, what? Expectations for the next rate cut quickly moved out to January of next year but then almost as quickly moved back to December. All of that happened in the first 30 minutes after the news had dropped but by 2:30 yields began to head back up, new high yields for the day were made by 2:45, and yields continued to rise until 3:00 when the 10-year printed its high yield for the day on its last trade.

Ignoring wave patterns, oscillators, moving averages and anything else I can think of, what struck me while looking at a daily 5-year yield chart was that after months of sideways trading, in the span of just 10 days the 5-year yield went from its lowest level since October 2024, to its highest level since August 2025 and after a 3-day bounce yields are headed higher still.

With yields all above last week's highs, wave theory would offer three potential explanations that I can see:

• Outright bearish with yield targets nowhere in sight but the patterns which support that outlook are very uncommon.
• Near-term bearish to the tune of 35-40 bps but which resolves with explosive rallies.
• More of the same choppy trading over an extended time with an eventual bearish bias, but with strong rallies developing from much closer to 5% in the 5's and/or 10's.

Wave theory doesn't have to work, but if it's going to and if I had to choose which of those 3 outcomes was the most likely, I'd go with door #3 and look to trade against major support and resistance levels. What else is new?