Wednesday, June 01, 2005

Bond Futures on the Close

The purchasing manager number sent the September bond futures up past the 117-30 level to the 1/2 point of the next box at 118-21. It looks to me like the reaction from 118-22 will hold support at the bottom of the box (117-30) and that this market will soon move up to either the 3/4 point or the top of its current box.

The bond futures have hit and slightly exceeded two other resistance levels which are drawn in blue in the hourly chart you see above. The first is the 3/4 division point of the range from the June 2003 high at 123-03 to the May 2004 low at 103-02. The second is the 7/8 division point of the range from the January 2000 low at 89 to the June 2003 high at 123-03. These division points are generally strong resistance levels so I think the next reaction will carry the market down at least 2 points, the extent of the biggest reaction so far in the uptrend from the March low at 109.

After that reaction is complete I think the bond futures will move up into the 120-121 zone.

No comments: