Bonds

Here is an updated hourly chart of pit trading in the December t-bond futures.

The thing that leaps out of this chart for me is the second higher low made this morning after the PPI and retail sales numbers. Given the tremendous amount of bearish sentiment about bond prices that Mark Hulbert pointed out here I think this is a very bullish development.

I now think that the November 4 low at 110-12 marked the end of the drop from the June 3 top at 119-23 (basis September futures). The market is likely to move up to at least 115 before the drop to 107 resumes.