Bond rally nearing an end?

We had very low volume, with price action indicating that buyers staid on the sidelines.

The 30 yr went straight down from 8:00 to 9:55 (CT) and then closed shop for the day.
<img src="http://www.elitetrader.com/vB/attachment.php?s=&postid=1056605"/>

 

yup! except to put it that new low at 2 o'clock

 

while everybody was sleeping

and then it went right back into its small trading range

 

probably nobody noticed except the NQ pit

 

Stocks dipped again after bonds closed -- another indication of a substitution effect taking place during the day between bonds and stocks in favor of the latter.

 

Selling bonds to buy stocks?
And, when the bond market closes, sell stocks ...

 

It means they stopped selling bonds to buy stocks because the pit is closed.

 

And when they stopped selling bonds to buy stocks.
The buying dried up in the stock market and the futures pits took it down. That's what I'm seeing

 

Exactly, and the bonds-stocks substitution effect could explain part of the difference you detected between cash and futures.

 

I believe Bernanke made a comment around 2:30pm that the market misinterpreted his readying for a pause last week. Watch out, Lehman putting out high ball Fed Fund prints again their Economist out on the wires today saying 5.50% in Fed Funds and the exact same thing, that "market misinterpreted" his statement.