Here is a daily chart of the September T-bond futures. I have drawn the boxes which have controlled the bull market which began in May 2004 from the 103-02 level in the June '04 contract.
As you can see the market's high on June 3 occurred at the top of the fourth box and during the past six weeks the bonds have dropped to the bottom of that same box. As I pointed out in an earlier post, sentiment among bond market timers is very negative.
The combination of these two facts leads me to expect a move up at least to the 1/2 point of the next box near 121-16 and quite possibly to the top of that box near 123-16.
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