After the first bounce, how important is the rally on Bonds?

Discussion in 'Financial Futures' started by gugu, Jul 30, 2006.

  1. gugu


    After the first bounce, how important is the rally on Bonds?

    For about three months the question was where the downtrend was going to find support and when the selloff was over due to the exhaustion signals on the trendline, signals that came up mostly on the last days of June.

    Well, finally, we can say we just saw a short-term bottom on Bonds with the 10-year issue making a 2-points run from lows, so, the question that now we have to make is how long this rally can last or is it just a bear market rally?

    Watching out the charts updated to July 30 is hard to answer the question (I know, of course, that in market terms never we are sure about anything one hundred percent, anyway…) because the market just closed the last Friday 28 on the upper side of the channel and ready to test a run-up but with nothing clear for now on.

    With 104'00 on bond futures as main bottom and 106'00/03 as key level to cross to the upside we must think the following days will be important to define the importance of the trend. That's because if we can remain above 106'00 without whipsaws the market could build momentum to take out the 107'00 and 107'16 as mid-term targets.

    If I have to choose percentages to the possibilities of a market going up after set a bottom I have to say we have 65% of chances for a market running (on 10-year bond) with 4.85/90 as main target on yields even disregarding the situation on the FED funds rates, anyway, we'll see if the crossing of 106'03/05 finally takes place in the coming days.