Thursday, August 11, 2005

Has It Started ?

As you know I am expecting a big move upward in bond and note prices over the next few months. I think the T-bond futures will make it into the 121-123 range and the 10 year notes into the 115-116 range.

You can see today's price action in the updated hourly charts above. I have been wondering whether or not the big move I have been expecting has already begun.

I must admit that I really don't have any conviction about this. In the last couple of daily guesstimates I said that the bonds would have to move above 114-22 and the notes above 110-16 before I would consider the possiblity that the upmove has started. As you can see these levels were broken this afternoon after the 10 year note auction results became known.

From this I conclude that the bonds are headed for the top of the current box at 115-04 and the notes to the 1/2 point of the current box at 110-30. After these levels are reached I will look for one of two developments, either of which would convince me that the bonds and notes are headed up big: the markets blow right past the box levels I have just cited (unlikely) or both markets react a half or 3/4 of a box downward and then turn up once more.

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