The Elliott wave case for a bond rally (decline in yields) is clear and it is compelling. These charts present the evidence. In Friday's STU, Pete "upgraded" the bond forecast for a rally to "probable," and the forecast remains intact. The [iShares 20+year U.S. T-bond Fund: TLT]has completed a five-wave decline from 109.34 on August 25 to 90.47 on December 15. At last week's low, wave five was equal to wave one and prices tested the lower trendline of the Elliott wave channel formed by the selloff. An extreme 92% of bond traders (trade-futures.com) were bullish the day of the price high, expecting even higher prices, while the same percentage dropped to just 11% the day of the bond low. Sentiment extremes occur at or near market turns and when they occur in conjunction with a complete Elliott wave structure the odds of a trend reversal are very strong. The TLT should rally for weeks to correct the preceding impulsive selloff. As the chart shows, the minimum target range is 97.68 to 99.90, which means 30-year T-bond yields are likely to fall into the 4.04% to 4.18% range, at minimum. Both ranges include the extreme of the previous fourth wave, which should act as a magnet. It would take a new price low beneath 90.47 (yield high above 4.62%) to negate this forecast because it would mean that wave v (circle) was not yet complete.