Bonds and Notes

Here are hourly charts showing pit trading in the March t-bond futures and the 10 year note futures.

I have been thinking that the bonds would drop to 113-08 before resuming their rally but I have changed my mind about this. The sequence of three higher hourly lows beginning with the 113-25 low on January 3 tells me that the market is heade up to 115-28. That level could well end the rally from the November 4 low at 110-12 in the December '05 contract.

The notes are headed up to 110-16. I now think that too will end the rally in the notes and that the 111 level will not be reached.