Wednesday, December 13, 2006


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

As you can see the market has broken below support at 113-04. The opening hour today was a wide range down bar reflecting aggressive selling in response to the retail sales number. The significant observation is that the market has continued downward after that opening bar. The consequent deduction is that the buyers were all short term time frame buyers. This means that the market must go lower to find longer time frame buyers before it can rally significantly.

I think the bonds have begun a move down to 110 or even a little lower than that. I expect today's break to continue down to 111-24 before we see a rally of as much as a point.

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