The 30 Year T-Bond futures posted incredible gains yesterday after the Federal Reserve decided to proceed with quantitative easing by injecting $300 Billion into U.S. Treasuries. Even though Bernanke stated the Fed will focus its accrual of Treasuries on the 5 and 10 Year Notes, the 30 Year was more than happy to participate in the incredible rally taking place.  In succession, the 30 Year futures have been jolted out of their downtrend, and are looking to head back north in a hurry.

The U.S. has taken care of the rising concern over excess supply to fund the government’s massive stimulus package.  Furthermore, the Feds are appeasing China by reassuring the East that their investment in U.S. debt will be a secure one.

Consequently, yields are dropping like a rock and it will be interesting to see if the movement translates into accelerated home purchases.  The challenge for the 30 Year futures in the near-term will be climbing back into the January trading zone.

If the futures are successful in doing so, we anticipate a retest of January highs.  Fundamentally, we see resistance of 132.39 with additional resistances hanging at 132.98, 133.36, and 133.69.  To the downside, we find supports of 131.92, 131.34, and 130.95.  The 30 Year Treasury Bond futures are currently trading at 132 01.0.

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