T-Bond trading comment (November 29, 2007)

After a little calm, the T-Bond has restarted its forward march, RSI is back at more reasonable levels andelasticity is ok, thus leaving room for higher prices. But if we look at a weekly chart, the picture might not be that bullish... Depending on tomorrow's close, we might be forming a reverse hammer. If the market closes in the low 117s, we would have a nice candle picture which could signal a reversal of the latest trend... Just to remind ourselves, this is what signaled the present bullish run we started at the end of June 07.

All that said, today was an interesting day with clear trends almost all day long. The 117-20 level offered some good support while the 118-06 zone provided us with a resistance. All in all, the market climbed by almost a full dollar today. This move was not a complete surprise with the continued widening of the LIBOR levels, the weak equities overnight in Europe and the month end buying indexers that have to re-adjust their portfolio duration to the upside. Another signal was also, yesterday's monter move in the equities that was not followed by the bond market. They only went causiously down, letting us know that if the equities showed any weakness', they would shoot up and that is what happenned today...

Our daily momentum turned long at the settle. Now we need a 118-05 print to be happy... We might see it on any weakness tomorrow as more people jump in the month-end band-wagon. Tomorrow we have PCE data as well as CPM.