In this morning's testimony before congress Fed chairman Greenspan said that long term bond yields can't go much lower. This is surely bearish news for bond prices. So we will get another chance to see if this dog barks. I expect the market's bearish reaction to Greenspan's prediction to be mild and brief (no more than a day or so on the downside) . If it is then we will have strong evidence that bond prices are headed much higher and longer term interest rates much lower.
The notes have already dropped below yesterday's low at 111-11, contrary to my expectation. My best guess is that the notes will drop no lower than my original target at 111-00 and frankly I don't think the market will go even that low. The hourly chart of the notes above shows some very short term price boxes drawn in blue. I think the notes will soon head up to the top of the second box near 112-11.
I think it is quite likely that the bonds hold above yesterday's low at 115-11. Even if they don't the worst I see on the downside is my orginal target at 115-04. The blue lines on the hourly bond chart show my estimates of very short term price boxes. I think the market will soon rally to the top of its second box near 117-02.
1 comment:
It took allot to make that call today as the bonds dropped. I see the outcome was as predicted, once it happened. Congrats!
Don Ewers
Post a Comment