Last week was just a killer for bond traders who are long. While T-Bills stayed at a 4.48 pct yield, the long end in yields took off, and I opined that the strength in rates (and corresponding weakness in bond prices), was not caused by bond market crowding out due to loan demand for capex spending, but was related to speculation in the metals, oils, and penny stocks on one hand and worried traders going to near-cash on the other. The situation was not occuring because of too many options, but because of fear of higher rates.

The 30-year T-Bond yield was up to 4.89 pct from 4.71 pct in a week. The 10-year bond zoomed in yield from 4.67 pct to 4.85 pct. Even the 2-year bond went from a 4.71 pct to 4.82 pct yield. That was an extreme move for bonds.

On Monday, the yields went even higher at the open, which you can clearly see on the 15-Minute data charts. But Tuesday morning and this morning, yields were pushed down hard at the open.

I noted a possible change in sentiment early today, and it appears that unlike yesterday the yields today are staying down. Today there may be a shift in traders' appetite for bonds.

But, while there is some strength in the bonds, the traditional capital intensive and commodity price sensitive groups are today's leaders on the U.S. equity market board (e.g., mining, construction, gold & silver, oil well services and equipment, and crops), and the economy-sensitive groups are mostly losers (e.g., paper products, med equipment, jewelry, fabricated plastic and rubber, advertising, restaurants, containers & packaging, business services, and tires).

Here is the leader and loser board table as at 1:43 pm ET:

That ought to send you a message.

So I have to think that the possible turnaround in bonds is likely a near-term scenario, or what is called a dead-cat bounce in a bear market for bonds. The longer-term outlook is still dim.

You see, if I think the recovery in bond prices is sustainable, I'm going to check the equity board for confirmation. I want to see the utilities and financials doing very well. It would help if I could see the high dividend-paying consumer staples doing well too.

Alas, that is not the case as of mid-day today. In fact the contrary is happening, so I have to continue with my belief that traders are still basically fearful of inflation and higher Fed rates in future, and that the stories in the mass media today that bonds are strengthening are misguided attempts to convey what is really happening in the capital markets today.

A contentious point is that pr firms working for Gnomes like the PIMCO Bond King wait for possible market reversals and use the opportunity to prime their pump.

In any event, it's up to you to make the call, which is why I continue to advise that watching price trends and cycles is more important than listening to stories.

The Treasury Yield Picture:

U.S. Treasury Yields -- Weekly data charts:

U.S. Treasury Yields -- Daily data charts:

U.S. Treasury Yields -- Hourly data charts:

U.S. Treasury Yields -- 15-Minute data charts:

The Treasury Bond Picture:

U.S. Bond Funds -- Monthly Data Charts

U.S. Bond Funds -- Weekly Data Charts

U.S. Bond Funds -- Daily Data Charts

U.S. Bond Funds -- Hourly Data Charts

U.S. Bond Funds " 15-Minute Data Charts

The Interest-Sensitive Consumer Finance Stocks Picture:

The interest-sensitive Consumer Finance stocks also had a very tough last week. In particular, the Government Sponsored Enterprises (GSE) were hammered. Yesterday that picture appeared to be changing, and so I was looking for what I saw early today in the bond market, which I pointed out.

Today, however, the GSE's are having to deal with issues like confidence in their failures in accounting and reporting, and the restructuring of their asset-backed mortgage portfolios. So, while they are still up from yesterday's pre-open, they have been settling back.

For each of these charts, just hit the back button on your browser to return to the blog.

Consumer Finance -USA -- Weekly Data Charts

Consumer Finance -USA -- Daily Data Charts

Consumer Finance -USA -- Hourly Data Charts

Consumer Finance -USA " 15-Minute Data Charts