US 30yr yields risk a near-term bounce

BofA Merrill Lynch notes .....

• We are bullish US Treasuries from 5yrs and out, with evidence saying that the back end of the curve should lead the way lower (in yield). While we target the Jan-30 lows of 1.150% (5s), 1.636% (10s) and 2.218% (30s), a look at the long term chart in 30s says that we should ultimately push significantly lower. 
  
  
• As such, we maintain our 5s30s flattener for 88bps and below. Back above 114bps would indicate a greater range trade than expected. Turing to the short term view for 30s, we are completing a 5-wave decline from the 2.870% Mar-06 high. Using the Elliott Wave principle as our guide, 5-wave moves are followed by 3-wave corrective moves. 
  
  
• In the next several sessions, we look for a corrective yield bounce, back toward 2.560%/2.633%. We would look to buy that yield bounce (price dip) for a push to the Jan lows, at 2.218% and below.