Friday, August 26, 2005

Bonds and Notes

Here are the updated hourly chart of the September t-bond futures and 10 year note futures.

Both markets are in uptrends which began from lows on August 9. Over the next couple of months I expect the bonds to move into the 121-123 zone and the notes to reach the 116 level.

Predicting temporary highs in an uptrend is difficult business as my efforts in the bonds and notes over the past week have illustrated. I am still working with the boxes defined in the last downtrend since they still seem to be controlling both markets' fluctuations.

As you can see in these charts the bonds this morning have reached the 1/2 point of the current box while the notes have been trading a bit above their correpsonding 1/2 points for the past couple of days. I have other reasons for thinking both markets will start reactions of at least a box from this morning's highs. If I am wrong about this then the most I see before such a reaction begins is a rally to the top of the current boxes in both markets.

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