In my last post on the bonds and notes I said that both markets would probably react to the 1/2 points of the next lowest box before heading higher once more.
The bonds stopped at 117-07, the 1/2 point of the 116-16 to 117-30 box, so a drop of a full box from there would bring the market down to 115-25, the 1/2 point of the next lower box.
The notes went a bit further than we expected, stopping at 113-13, the 3/4 point of their 112-16 to 113-23 box. So a drop of a full box from there would bring the notes down to the 3/4 point of the next lower box at 112-06 which is now my target for the reaction in the notes.
As I have said often in previous posts both markets have further to go on the upside. My 2005 bond market forecast predicted a bond market top for August 2005.