The 30 Year T-Bond futures continue to weaken after reaching our inflection point yesterday. The downward movement came despite a late session selloff in U. S. equities. The 30 Year futures are showing us time and again their normal negative correlation with the S&P futures is out of sync due to outside market forces.

The combination of the large increase in supply of government debt coupled with China losing its appetite for U. S. Treasuries is raising yields and lowering price. Due to the mass confusion and uncertainty swirling around U. S. Treasuries, the 30 Year futures remained locked within the trading range beginning in early February.

Yesterday's lows were above previous March lows, maintaining a near-term situation in which the futures can bounce around. On the other hand, once the 30 Year futures do break out in one direction or the other, we anticipate large volatility in the near-term. Fundamentally, we see resistance of 126.64 with 2nd tier and top-end hanging at 127.02 and 127.42, respectively.

To the downside, we find support of 126.078 with additional supports sitting at 125.75, 125.34, and 124.98. The 30 Year Treasury Bond futures are currently trading at 126 02.5.

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