Tuesday, December 19, 2006


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

The PPI news this morning dropped the market sharply as you can see from the wide range down bar I have highlighted in red. But there was no follow-through selling so I conclude that longer time frame traders were buyers on the news. The market has to rally in order to find the longer time frame sellers who I think are currently in control of this market and will be for a few more weeks. My guess is that these sellers will enter in the 113-12 to 113-16 range which should prove to be resistance for this rally.

I expect the bonds to drop into the 109-110 range over the next few weeks.

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