Mel's Blog

It's been a volatile ride in the Bond market and yesterday was no exception.  A worse than expected report on New Home Sales for February pushed Bonds higher.  But it turned out to be a head fake, as prices retreated back under the ceiling of resistance at the 25-day Moving Average, to finish the day with only a modest gain. 

This morning, Bonds are once again unable to muster much strength on weaker economic news.  Consumer Confidence for March was reported at 107.2, which was slightly worse than expectations of 109.

Traders are looking ahead to Fed Chairman Ben Bernanke’s scheduled testimony before Congress tomorrow at 9:30am ET about the economy and Fed policy.  Mr. Bernanke could spark even more price volatility on this already jittery market once he starts discussing housing, inflation and Fed policy. 

Since Friday's negative stochastic crossover and breach of support at the 25-day MA, Bond prices appear to have a downward bias.  The Bond does have support around $99.00, but unless prices are able to break back above the 25-day MA, a bias towards locking appears prudent.