T-bonds

Here is an hourly chart showing regular hours trading in the September T-bond futures. I last commented on this market here.

I think the bond market made an important low on May 15. The t-bond futures should rally about five points from there to roughly 110 or a little higher. In fact I think there is a better than even chance that the May low will prove to be the low for the year in the bond market.

Even so, I am operating on the more conservative hypothesis that the move up from 105 is corrective and that it should thus evolve as a series of three phase rallies. I think the second phase of the first three phase rally was completed this morning at the 104-27 level in electronic trading. The third phase should carry the bonds to 108-20 or so.

After 108-20 I envision a three phase drop followed by another rally which will carry the market into the 110-111 zone.