In this June 1 post on the bond futures I said that the market would probably move to the 3/4 (at 119-01) or the top of the current box (at 119-12) and then drop by a full box (46 ticks) or so before the upswing from the March low at 109 resumes.
On this morning's employment news the market moved up to the 1/2 point of the next higher box at 119-23 but then dropped sharply by almost a full box in only a couple of hours. I think the bonds will drop to the bottom of the box at 117-30 before another rally can start. This market will move above 120 before any big decline sets in.
The picture in the 10 year notes is similar. The market will find support near 113-14, a level that would make the drop from today's high about a full box (39 ticks) in length. After that level is reached the move to 116 or so should resume.
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