T-bonds

Here is an hourly chart of December T-bond futures. I last commented on this market here.

The move above 111-08, the last high prior to the low at 109-27, forced me back to the bullish side of this market. The rally has been very persistent but shows low volatility. This tells me that it has much further to go because significant trends typically begin and end during periods of relatively high volatility.

No obvious boxes formed on the way up from 109-27 so I must fall back on other methods to estimate support and resistance. The first level above 111-08 that catches my attention on this chart is the low at 112-01 on September 29. The market is now stalling at that level but I think it will break through, perhaps after a reaction of 20 ticks or so.

In my opinion a more important resistance level stands at 113-00, the high made right after the release of the last employment number on October 6. Sellers became very aggressive there and I expect we shall see some "nostalgia" selling when the market makes it back to that level. Even then I doubt the market will drop much below 112-00.

The low at 105-11 in May marked the start of a new bull market in bonds. The swing up from 109-27 should carry to 115 at least and quite possibly higher than that.