KR Technical Analysis - - - Our Tech View
A rather quiet, narrow range session ahead of the much hyped NFP report. After today's ADP report it seems that consensus is now around -100k or is that what the bull camp needs to hold current levels? There should be some fireworks in our abbreviated session and we would caution not to counter-trade tomorrow's trend.

Today's session created a daily chart "inside day" which doesn't signal direction, but rather a imminent increase in volatility and range extension. We are going into this number under heavy overbought conditions, around 2.5 points above the 18-day average. So, any disappointment could lead to a fairly severe correction. On the upside, we have already attained our near term objective, USU 117. If we can solidly breech this level we would then anticipate a new bull leg to the USU 119 area. Probably pretty quickly.

A potentially troubling observation: with the market this bulled up both technically and fundamentally, why did the belly of the curve underperform so much today, cheaper by 6.1bps and closing within 2bps of its one year high yield??

The money market basis EDZ closed about 2bps above its 40-day average, but may be looking toppy. The near term key will whether the recent daily chart gap, 96.625-71, stays open tomorrow. Anticipate at least 25bps of movement either way in the next few sessions.    4:53 PM

KR Technical Analysis - - - Our Tech View
Tuesday's price action was a bit disappointing and eventually confirmed our early session recommendation to take some profits off the table. Since we basically reached our near term objective of USU 117 on Monday, we were curious if prices could hold at extreme overbought conditions, about three points above the 18-day. Needless to say, we stalled and failed, but in the process greatly reduced our overbought situation. As we have been observing over the past year now, the market generally likes to be much closer to the 18-day average ahead of NFP.

While we don't feel a further two point correction to the 18-day, 113.22, is likely tomorrow; the tiny USU gap at 115.015-02, or the 9 & 40-day zone around USU 114.12 is possible. Also, the front has stalled at the EDZ 40-day, 96.83-84, and the large gap at 96.625-71 remains open and inviting.

At this juncture, the overall tech picture remains positive, which co-incides with our fundamental viewpoint. However, we all know how crazy this market can get in a nano-second. With the long Birthday weekend drawing close, we are sold out bulls waiting and watching. Moreover, despite all the hype of the NFP report recent price action has dubbed it more of a non-event than not, go figure?
6:35 PM    6:42 PM

KR Technical Analysis - - - Our Tech View
The weak buy signal generated last Friday has a good chance of being turned back to neutral basis today's price action. The past three days highs in the USM 117.20-28, encountered the 40-day average resistance zone and have been soundly rejected. This zone also represents the middle of our broader seven point trading range since mid February. Obviously, the market is not ready to take the leap into the upper end at this juncture since economic data has not been horrible, just lousy.

The 18-day zone is at USM 116.15 today and has provided stubborn resistance throughout today's session. A close below this level flips us neutral, but more importantly could result in a "re-auction" of the refunding paper. Where is the reinvestment of that 71bill odd that's floating around?

The front end basis EDZ has once again broken down below all short term moving averages. Of note, another daily chart gap has been opened today between 97.07-13, putting us in position for a retest of the 96.80 low area.
12:55 PM    12:59 PM

KR Technical Analysis - - - Our Tech View
A successful conclusion to the May refunding saw prices close at their best levels in four days and more importantly,above the 18-day average. This turns our short tech indicator into a neutral stance. In the money market EDZ8 finally filled a daily chart gap from Apr 17, and opened a new one, 97.15-16. It also closed above the 18-day for a second consecutive day. All in all, positive price action but upside follow thru is essential to convince us that this apparent trend change is real.    6:04 PM

KR Technical Analysis - - - Technical
Today's USM challenge of its 9-day average, 116.09, was soundly rejected sending prices back down to the lows of its three week range. This the sixth time down here and the lowest close, increasing our concerns that a new down leg is possible. Whether this price action is simply an auction set-up or something bigger is up for discussion. This was the lowest close since Feb 27.

More to follow...    3:47 PM

KR Technical Analysis - - - Technical
The money market remains under pressure as a new week of trading commences. EDZ8 is last at 97.63 or 2.37%, down 20.5bps on the day and 55bps below its recent high on Mar 17. We are testing critical technical support in this zone backed by the daily chart "intermediate" uptrend line and the 40-day average. We have not traded below either of these tech indicators since Oct 17, 2007.

So, these levels represent a great buying opportunity if it holds. Conversely, a failure from this zone would have significant bearish implications.
9:30 AM    9:41 AM

KR Technical Analysis - - - Technical
Over the past three sessions the market has experienced history making tape bombs, stress and Fed machinations. The USM "pit" highs came very close to filling the Jan 22-23 "island top" pattern. Nonetheless, it remains open and continues as a major negative technical influence on the marketplace. Tuesday's price action created a daily chart "inside" day, which does not signal direction, rather an imminent increase in volatility (as if we need anymore) and range extension.

Overnight electronic trading has given us further price deterrioration, last at 118.27. Unless prices rally to the USM 119.06 level a new daily chart gap will be created. If this scenario unfolds, we anticipate quick, further downside price action to the USM 18-day average zone 117.20.

We view the Fed's actions over the last several days as appropriate, if not a bit behind the curve. The FOMC's heavy, statement emphasis on inflation concerns are probably a smokescreen, for the near term anyway, as they attempt to regain some semblance of control over an increasingly rabid marketplace that got it wrong and now (like any child or teenager) wants to be forgiven or in this case bailed-out.

Time and patience are now required to find out if the current dose of medicine will cure the patient. Pimco and others want an immediate outright purchase plan of MBS product to occur. Others want the funds rate to basically go to near zero quickly. Add in plenty of other self-serving opinions.

The FED must carefully consider the long term implications of any further rate cuts and actions. The veritable future of the Republic as we know it may hang in the balance!    9:17 AM

KR Technical Analysis - - - Technical
Thanks to late session selling pressure, Ambac again, we saw USM close on the lows. Post-pit the downward slide accelerated and we have another potential daily chart gap opening with ZBM ending at 117.14-15. Which just happens to be inside the Feb 28-29 gap, 116.27-117.21. So, if this scenario plays out we would create another daily chart "island" pattern.

We remain under our near term, 18-day, tech buy signal. Today's late, weaker price action markedly reduced the overbought condition. However, until NFP, the USM 118.16-119.00 area is now solid resistance. If, we gap lower tomorrow and it holds, we should quickly visit the 18-day support zone, USM 116.14-18, filling the nearby gap.

Regarding the above mentioned "island" scenario: It is so diametrically opposed to the majority fundamental viewpoint, due its large negative technical implications, that we will defer comment at this moment. Nonetheless, if-if-if it happens, you have been warned!    5:39 PM

KR Technical Analysis - - - Technical
Wednesday's volatile price action has gotten our attention, leading us to predict that one of two scenario's are about to unfold, in dramatic fashion. We had an extreme overnight high trade, opened an early gap, gyrated throughout the session, closing weakly on the lows. Sloppy price despite what was viewed as benign to friendly data? Big Ben, under intense scrutiny and criticism, speaks manana and who knows what he will say!

The Bear Scenario: Tuesday and Wednesday's price action was a blow-off top, achieving the price objective of the daily chart Dec 14/26 "double bottom" pattern around USH 120. Importantly, post 3PM electronic trading saw the market cave further, low 118.27. This brought USH into the Jan 14/15 gap area, 118.22-31. IF, for whatever reason, a gap opens and holds below 118.31 tomorrow we will create an "island". This is an extremely rare, for fixed income, and in this case very bearish pattern. At a minimum it would signal a retracement to the 18-day ave, USH 117.04.

Look for first resistance at USH 119.04-08, may be important. Shaky next resistance could emerge in the USH 119.17-23 zone. Above here, see below.

The Bull Scenario: What we really have is the initial breakout above a daily chart "inverted H&S" pattern, encompassing the period from Nov 26 to Jan 14. The neckline is around USH 119.06 and the objective is USH 124.26, or thereabout. The gap at 118.22-31 stays open/and or the 9-day ave at 118.16-21 stops the downslide and generates a rally and close back above the neckline. Off to the races! Soberly, the potential right shoulder is running out of time and without a breakout by Monday, could be negated.

We will call first support at USH 118.16-22, for reasons stated above. Light next support could emerge at 118.00-04. Critical support will emerge in the 18-day zone at USH 117.06-12. Below here see the gap tracker.

Gap Tracker: There are five unfilled gaps below current levels. 118.22-31 from Jan 14-15 116.03-04 from Dec 28-29 114.21-26 from Dec 27-28 112.05-11 from Oct 18-19 111.21-28 from Oct 17-18

A nearby 118/120 Apr/May out-of-the-money strangle seems appropriate.    7:57 PM

KR Technical Analysis - - - Technical
USH8 created another daily chart gap in today's session, 114.14-15. Then mounted an impressive rally to close slightly above the 9 & 40-day averages. We have significantly reduced the oversold condition -- now only one point below the 18-day average. Tomorrow's TAF results ( exactly how much information will be released is unclear ) should be the main trading event.

Either the 40-day at USH 115.08-10 or the 9-day at 114.30-02 is the first support zone. Lower support should be in the 114.12-16 gap zone. Below here recent lows at 113.18-24 might be support.

Important resistance is at 116.12-16, the 18-day zone. Further resistance should emerge at USH 117.06-11, unfilled gap. Above here, someplace in the 118 handle.

Gap Tracker:
The four USH unfilled gaps are these:
114.14-15 from Dec 17-18
117.06-11 from Dec 5/6
112.05-11 from Oct 18-19
111.21-28 from Oct 17-18

The one EDZ8 unfilled gap is:
95.675-685 fromOct 17/18

Looking back at historical price action, in June-Aug 2003 period the USU03 contract traded from a high of 123.02 to a low 103.27. During this dramatic sell-off we saw spreads vs the 18 and 40-day averages attain levels in excess of six and nine points respectively. Therefore, things can get crazier then they seem now.    5:02 PM

KR Technical Analysis - - - Technical The market is lower and has broken below the 40-day ave, USH 105.04, for the third time in four sessions. We are very curious to see if it becomes resistance or is this just another intra-day breech. If we close below it the technical picture will have moved into a higher level of bearishness. The alternative is a base building for a future retest of the 18-day.

Gap Tracker: We began the week with five unfilled overhead/below gaps, two filled, three to go! Remaing unfilled gaps are at 117.06-11 from Dec 5/6 and Oct 18-19 at 112.05-11 and Oct 17-18 at 111.21-28.

USH first resistance is at 115.00-06, the 40-day area. Next resistance is at 115.24-28 area. Heavier resistance should emerge at USH 116.07-11, the 9-day ave zone. Recent lows are first support at 114.014-20. Next support should emerge at USH 114.00-04. Lower support should be in the 113.00-08 zone.

We are under a technical sell signal and the markets are a mess. So any attempt to fade resistance zones will have very tight stops.

Looking back at historical price action, in June-Aug 2003 period the USU03 contract traded from a high of 123.02 to a low 103.27. During this dramatic sell-off we saw spreads vs the 18 and 40-day averages attain levels in excess of six and nine points respectively. Therefore, things can get crazier then they seem now.    9:38 AM

KR Technical Analysis - - - Technical That's two points in two days,two gaps filled and a test of both the 40-day and 18-day. WOW! Can't wait for tomorrow. Upcoming third tier economic data should be irrelevant for price action. Recent history has been a sharp directional reversal of the FOMC afternoon's price action. So manana should be volatile as well. Market still taking no prisoners! Very unstable and treacherous price action!

Gap Tracker: We began the week with five unfilled overhead/below gaps, two filled, three to go! Remaing unfilled gaps are at 117.06-11 from Dec 5/6 and Oct 18-19 at 112.05-11 and Oct 17-18 at 111.21-28.

While the post-FOMC price move was impressive, we must alert that the volume was basically "thin air" until we approached the USH 116.08-16 late session pit highs. Subsequent electronic trading brought USH to new a high at 116.26, where it met solid 18 & 9-day resistance. Overnight action holding above 116.16 would create another gap!

USH first resistance is at 116.24-28, the 18 & 9-day area. Next resistance is in the gap at 117.06-11 area. The 118 handle is whatever resistance it is? We will call for light support 116.00-04. Next support should emerge at USH 115.12-16. Important 40-day support is in the 114.28-00 zone.

We are under a technical sell signal and the markets are a mess. So any attempt to fade resistance zones will have very tight stops. On the other hand, who wants to buy these rather expensive levels? Cash 2Y at 2.95% and 10Y at 3.97%, a definite leap of faith as we approach year end.

Looking back at historical price action, in June-Aug 2003 period the USU03 contract traded from a high of 123.02 to a low 103.27. During this dramatic sell-off we saw spreads vs the 18 and 40-day averages attain levels in excess of six and nine points respectively. Therefore, things can get crazier then they seem now.    6:50 PM

KR Technical Analysis - - - Technical
Last week's range for USH was 3-1/2 points and 31.5bps for EDM8 as volatility remains extreme. We decisively broke below two-month daily chart uptrend lines and shattered both 9 & 18-d moving average zones. On last Monday we were solidly overbought, 2 points above the 18-day, by Friday we were solidly oversold, 1.5 points below the 18-day. Get the picture? Take no prisoners!

In the process, we opened two unfilled overhead gaps at USH 116.11-14 and 117.06-11. If this is a gap sequence, we have at least one more possibility , if not two. Very unstable and treacherous price action!

We have unfilled daily chart gaps below current levels from Nov 14-15 at USH 114.13-19, from Oct 18-19 at 112.05-11 and from Oct 17-18 at 111.21-28.

USH first resistance should emerge in the 115.14-18 zone. Next resistance is in the 115.28-00 area. Key near term resistance is at USH 116.11-21, the 18-day and "runaway gap" zone. Light support will be at Friday's lows 115.00-04. Important 40-day support is in the 114.20-24 area, just above one of the open gaps. Below here, watch out!

Looking back at historical price action, in June-Aug 2003 period the USU03 contract traded from a high of 123.02 to a low 103.27. During this dramatic sell-off we saw spreads vs the 18 and 40-day averages attain levels in excess of six and nine points respectively. Therefore, things can get crazier then they seem now.    6:07 PM

KR Technical Analysis- - - Technical
Three weeks and counting, inside this one-point USM trading range. The first two auctions were mixed. All eyes are on 2:15PM. The market is coiling for imminent range extension.

If, the FOMC statement is unchanged, we just cannot see prices appreciating from current levels. However, if USM can hold, and close above USM 112.02, a sizable rally should commence, 113.16ish target. Otherwise, our current buy signal will be put in jeopardy.

First, light resistance is at USM 112.10-14. With another band emerging at 112.28-00. Heavy and last near term resistance is at the multiple top high zone 113.12-17. Above here, a moonshot.

All short term moving averages are now clustered in the USM 111.15-21 area. Below here, our buy signal is in trouble. Next support will emerge at USM 110.24-28. The 60-week average zone is in the USM 110.05 area, the Apr 13/16 lows. Importantly, the 60-week has returned to upward momentum.    12:00 PM

KR Technical Analysis- - - Technical
Three weeks inside a one-point USM trading range is starting to fray everyone's nerves. The 3Y auction was less than stellar, surprising for the last one. No economic data and a 10Y await us. But all eyes are on Wednesday at 2PM. The market is coiling for imminent range extension.

If, the FOMC statement is unchanged, we just cannot see prices appreciating from current levels. However, if USM can hold, and close above USM 112.02, a sizable rally should commence, 113.16ish target. Otherwise, our current buy signal will be put in jeopardy.

First, light resistance is at USM 112.10-14. With another band emerging at 112.28-00. Heavy and last near term resistance is at the multiple top high zone 113.12-17. Above here, a moonshot.

First support is at USM 111.28-00. All short term moving averages are now clustered in the USM 111.13-20 area. Below here, our buy signal is in trouble. Next support will emerge at USM 110.24-28.    8:38 AM

KR Technical Analysis- - - Technical
The market carved modest gains out of soft housing and confidence data. Actually, we were a bit surprised by the rather feeble reaction. The 40-day average at USM 111.29, stalled upside price action and could be signalling a near term range top. Seasonals are still in a negative timeframe, supply looms, data releases continue and we sense a complacent attitude towards further price appreciation until NFP arrives.

Crude Oil and metals remain volatile, while the stock market acts bulletproof. The dollar may be the real "wild card" going forward. Meanwhile, the money market is starting to get pricey again as EDZ7 now gives 62% probabilities on a 50bp cut.

Last near term resistance is the USM 111.26-30 zone, backed by the 40-day. Solid price action above this level would imply the start of a new upleg. Light resistance could emerge in the USM 112.12-16 area, solid overbought territory. Next resistance should be the 112.26-30 zone. The probable chart objective is the Feb 27-Mar 14 multiple top zone at USM 113.13-17. Above here, moonshot sparked by recession anxiety and imminent Fed ease fever. However, we feel that the timing for such a move is premature, two to six weeks down the road seems more appropriate.

First support, provided by the hourly chart, is at USM 111.14-18. The 9-day is gaining upward momentum and will be in this zone by Thursday. Key trend support, backed by the upturning 18-day, is in the USM 110.30-02 zone.    8:43 PM

Technical Analysis
On balance, softer economic data sparked a modest bounce in the bond complex, a weaker dollar and a steeper curve. This positive price action managed a close above the USM 18-day average 111.02, just barely. Thereby, neutralizing our month long sell signal. A second consecutive close is necessary to throw a buy signal, so we remain cautious at this juncture. Especially, with an extremely light eco calendar for the rest of the week.

First resistance should emerge in the USM 111.12-16 area. Heavier resistance will develop in the USM 111.28-00 zone, backed by the 40-day average and 50% retracement level.

Key trend support must hold at USM 110.30-02. The 9-day average at USM 110.16-20 is next support. The 60-week average and recent lows at USM 110.02-06 is last near term support.    7:27 PM

KR Technical Analysis
The market is still in a funk. Soft housing data and heightened geo-political tensions did nothing to change the down and steeper trend. Durable Goods is suddenly an important report? Please! Chairman Ben will calm the roiled waters with tomorrow's testimony. Doubt it!

Be prepared for range extension and volatility, between now and NFP ( +200k? ).

The sell signal remains in control, as we closed below the 40-day average USM 111.28, for the first time since Feb 26. However, recent lows have flirted with oversold territory and held. If USM 111.19 caves, it's bearish and our next significant support zone is the USM 110.06-10 zone, backed by the 60-week average. There will be stops along the way, but none that we trust at this point.

First resistance is the 112.08-12, 9-day area. The key 18-day resistance zone is at 112.20-24. Both average's downward momentum is accelerating. The multi-week high zone at 113.12-17, is breakout resistance.

We are wary and playing it very close to the vest.    8:53 PM

KR Technical Analysis
Technicals are giving a mixed picture as we await the FOMC decision. USM generated a sell signal yesterday, TYM is still in a buy, and TUM is a sell. Chart patterns are split between potential triangle or bear flag formations. A number of unfilled gaps remain below the market. Upside breakout level is crystal clear above us. Until 2:15 PM today, max intra-day range should be no more than USM 8/32s from the close.

Key near term resistance is the USM 112.25-30, backed by the 9 & 18-day averages. The cluster of highs in the USM 113.12-17 is last resistance. Above here the daily chart definitely will look like a chart breakout. USM 113.30-02 is suspect resistance, with the chart objective the weekly chart double top around 114.28.

First support is in the USM 112.16-20 zone, the bottom of the potential daily chart triangle pattern. Below here looks like a chart breakdown. Next support will enter at USM 111.24-29, the breakaway gap zone and 40-day average. Next stop would be somewhere in the USM 110 handle.    8:15 AM

KR Technical Analysis
Top tier data meets a rather skitzy/volatile bond market on Thursday. Hard to say, what will dominate price action: techs, fundamental data or the Carry/Dow trade frenzy. Anyway, should be fun!

Over the past twelve sessions, we have had eleven intra-day highs between USM 113.08-17. While we aren't sure what this pattern signifies, we have our guesses. If, the 18-day, USM 112.20, holds a daily chart "flat topped" triangle could be forming, bullish. If not, the pattern is a nasty top, and we probably go down hard.

Key support is the 18-day zone at 112.18-22. Next support will emerge at the "breakaway" gap zone, USM 111.24-29. Last near term support is in the 40-day area, USM 111.10-14. The USM 113.12-17 zone remains stubborn resistance. There are some overnight spike highs at 113.30-02, but their value as resistance is dubious. Above these chart points, there is a weekly chart "double" top around 114.28.

We will honor the 18-day zone and build a modest long position, with a tight stop. Great trade location as far as we're concerned! A 1 to 2 point trade is on the horizon, be patient, trade decisively!    10:23 PM

KR Technical Analysis
After another overnight, test of the 18-day average zone, the market bounced nicely and held a majority of it's gains. The question: was it a "dead cat" bounce? The 9-day resistance zone at 113.00-04 stalled upside action, without much trouble. Retail sales, 10Y auction and a daily chart "inside" day, should give us a good range trade tomorrow.

First resistance remains the 9-day zone, USM 112.30-02. Note the 9-day has turned Down. The USM 113.12-17 is next resistance, the last two weeks daytime highs. The overnight spike highs zone at 113.30-02, is now suspect resistance. Above here, weekly chart "double" top around 114.28.

First and Key support is the 18-day zone, now USM 112.12-18. Note, the 18-day is accelerating upward. Next support will emerge at the "breakaway" gap zone, USM 111.24-29. Last near term support is in the 40-day area, USM 111.08-12.

It really is an unstable world, getting worse day by day. Stay nimble!    6:00 PM

KR Technical Analysis
USM has closed at either 113.05/06 for the last three sessions. Our, initial chart objective and 38.2 Fib zone, as price action appears to be forming, a daily chart upward sloping bear "flag". The overnight spike highs on ZBM give the chart a "double top" look. The front end is rich, in our opinion, with EDU7 priced for two eases. The equities/carry unwind/gold/Yen, trades spectacular isn't over yet, but techs suggest an imminent return to normal ( whatever that is ) price re-action in Bond land.

We continue to have a USM gap sequence in place, 112.07-13 and 111.24-29. The overnight and early Monday trade, high 113.30, potentially created the "exhaustion" gap, which was immediately closed on the pit opening with 113.11 prints. We have not been able to sustain price action above this area, a negative.

First resistance, the top of the upflag, enters at USM 113.16-20. The spike highs, 113.30-02, are next resistance, but suspect, triple do not exist in chart land! The Nov 27/Dec 4 weekly chart "double top" high at 114.28 would be the next objective.

First support, the bottom of the flag, is USM 113.00-04. Next support is at 112.18-22, the 9-day, but our hunch is a lite zone. The "runaway" gap 112.07-13 is the next objective/support. The 18-day average is in the "breakaway" gap at 111.24.

NFP on the horizon, perfect. Stay nimble, gang! We maintain our flatter and defensive position stance.    6:22 PM

KR Technical Analysis
The market has now spent four sessions straddling our key resistance zone, USH 111.14-19. Unable to expand upside momentum on last week's soft data or sell-off on Wednesday's testy CPI report. With crude oil, gold and FX ( USD/Yen) showing some extreme volatility, the US TSY market is a terrible bore right now!

Until proven otherwise, the USH 111.14-19ish level remains a key resistance zone. The USH 111.26-30 spike high zone, the beginning of overbought territory, is next resistance. We maintain that a solid close above this zone is required to begin an upside chart breakout. The longer it takes, the more willing we become to fade this area. If/when, the USH 112.28-113.06 area would be the next objective.

We remain under our 18-day buy signal, patiently waiting for a better entry zone. First support is in the USH 110.30-02 zone , backed by the 9 & 40-day averages. Probably, at least a nibble zone. Key support is the 18-day average zone, USH 110.18-22. Close your eyes and buy this level, or at 110.12, the 60-week. Last near term chart support is in the USH 110.02-06 zone.
Below here anticipate a slide to the Jan 26-31 lows at USH 109.06-07.

For the bored/frustrated/bewildered pull up this article; Bonds Lose `Masters of Universe' as Volatility Falls Feb. 20 (Bloomberg) -- The market that once told every other market what to do, also known as U.S. government securities, is so dull these days that the world's biggest banks are losing interest and bowing out.    8:54 PM

KR Technical Analysis
Two down, one to go. Thus far, the refunding has to be viewed as a success, at least from the Treasury's point of view. During the course of the 3 & 10Y auctions, the market has managed to reverse a two month long downtrend, flipping our technical posture to bullish.

With the 30Y on deck and no eco data, we are wary of fading the market at current levels. The first good resistance level should enter in the USH 111.14-19 area. This zone is backed by the 40-day, open daily chart gap, start of overbought territory and the 38.2% retracement of the Dec-Feb move, USH 111.14.

There is a possibility that we are creating a daily chart H&S pattern. The right shoulder needs at least another three days, to be symmetrical. The neckline would be, USH 111.14-18, add this to the list above! A close above this zone probably means, "close your eyes and buy them".

Since both the 9 & 18-day aves are still below the 60-week ave, USH 110.15, the 110.08-15 area is critical support. A failure from this zone makes any potential support zones suspect, 109.28-00 and 109.06-10.

The best rallies are front end led, we see no reason for a moonshot right now.

USH7 Chart - - - TYH7 Chart    9:19 PM

KR Technical Analysis
The back to back "inside" days certainly gave us some volatility and range extension in today's session. In the process, we created a daily chart upside "outside' day and closed above the 9-day average, USH 110.03, for the first time since Jan 9. Oversold conditions have been neutralized, and we view today's, positive price action, as just a short covering bounce. Two heavyweight data reports await the market, ISM and NFP.

A close above the 9-day usually suggests a test of the 18-day average. Therefore, the market could bounce a bit further, but should run into very heavy resistance in the USH 110.16-21 zone. This area is backed by the 18-day and more importantly, 60-week average. In order to reverse the current downtrend, in place since early Dec 2006, we must see a weekly close above this zone. We have serious doubts about a successful trend change at this juncture and will trade accordingly.

If it does occur, the next upside objective would be the USH 111.17-18 area, an unfilled daily chart gap and 40-day average.

Baby support could emerge at USH 109.28-00, with better support in the 109.19-23 zone. Last near term support in still at recent lows, USH 109.06-10. A breach of this area will get very nasty to the downside.

Seasonals remain negative, the refunding is next week and we believe that no one, really has a handle on near term economic activity. The front end has minimal ease probablities priced in for 2007. Rate hike talk has resurfaced. But, borrowing needs, according to Treasury, will be reduced as the year goes on. Crude oil and gold are volatile as ever. Geo-politically, there are to many hot-spots, that could blow in a heartbeat, to list. The US political landscape, enough said.

It's still early in the year and our Crystal Ball, remains murky. Remember, the trend is your friend! USH7 Chart - - - TYH7 Chart    6:27 PM

KR Technical Analysis
Price action has extended to the downside somewhat in the morning session. The 18-day average resistance zone, USH 112.06-10, has now capped prices in four consecutive sessions. keeping the sell signal alive, for the time being anyway. We have slumped below first support, USH 111.28-00, the 9-day, which is now a baby resistance zone.

If, we do not trade below USH 111.17, or above 112.27, by the end of Friday's session, we will create a weekly chart "inside week". The retail sales data looms large for near term price direction.

SH7 Chart - - - TYH7 Chart    10:59 AM

KR Technical Analysis
USH created a daily chart 'inside day' in Monday's session. Generally, a signal for range extension and volatility increase, though we are hard pressed to come up with a catalyst. Early price action is lightly testing the important 18-day resistance zone at USH 112.06-10. First support should emerge in the 9-day zone, 111.28-00. Price action outside this tight range could constitute the beginning of a trend move.

USH7 Chart - - - TYH7 Chart    9:32 AM

KR Technical Analysis
The market maintained its positive tone in Thursday's session. Data was viewed as softish, the ADP report led to a raft of decreases in NFP estimates and reports of hedge fund asset allocation trades, into Tsy's bolstered price action. The money market has put three cuts back on the radar screen by the fall. A very confident, no fear posture ahead of NFP. Which gives us pause.

Technically, we closed above the 9-day average for the first time since Dec 5, a positive. However, upside price action was capped by the 18-day zone, USH 112.18. This is the trend reversal average, that requires two consecutive closes to change our current sell signal. We do not recommend establishing new long positions at these levels. A failure from this zone could develop into a nasty, swift retest of last week's lows, USH 111.04-10. Solid price action above this zone must be respected, finally giving a positive technical underpinning to our bullish fundamental outlook.

We view a major bet, either way, ahead of this NFP release as somewhat foolhardy. The year has just begun and we see many cross-currents in the overall marketplace.
* Technicals remain in a negative mode.
* We have yet to see economic data that can justify a further decline in yields, and more importantly scare the FOMC boys and girls.
* Dow at all-time highs, no recession worry here.
* USD on fire, not exactly an ease scenario.
* Crude oil and Copper collapsing, signalling economic slowdown or the popping of a speculative bubble?
* The Democrats now in control of Congress.
* The December liquidation of the COT's long positions has only been modestly rebuilt. Plenty of firepower, either way.
* January seasonals are a negative for bonds.
* Iran, North Korea, Terrorists..

Just because you're a life long Giant fan, doesn't mean that one should bet the ranch on Eli ( the adopted Manning ) beating the Eagles. There is no clear trend or chart pattern suggesting that we are in anything other than a trading range for the near term future. Be careful gang, it's way to early to dig a hole in the P&L.

USH7 Chart - - - TYH7 Chart    8:39 PM

KR Technical Analysis- - - USH7 Chart - - - TYH7 Chart
USH filled its daily chart gap. The 9-day average has seemingly rejected this morning's bounce. Today's close might be revealing to investor attitude. Between ADP and ISM the market will probably trade very cautiously into NFP. Real money will undoubtedly be sidelined until that release, leaving the market vulnerable to fast money attacks.    10:32 AM

KR Technical Analysis- - - USH7 Chart - - - TYH7 Chart
USH has opened a daily chart gap in early trading, 111.27-112.00. We briefly spiked above the 9-day average, USH 112.03, but are now straddling this zone. The ADP report has obviously caught some players off-sides. We went flat and await the ISM report. A close above the 9-day, with an open gap would be constructive. However, we have our doubts.    8:49 AM

KR Technical Analysis- - - USH7 Chart - - - TYH7 Chart
USH has opened a daily chart gap in early trading, 111.27-112.00. We briefly spiked above the 9-day average, USH 112.03, but are now straddling this zone. The ADP report has obviously caught some players off-sides. We went flat and await the ISM report. A close above the 9-day, with an open gap would be constructive. However, we have our doubts.    8:46 AM

KR Technical Analysis- - - USH7 Chart - - - TYH7 Chart
The market has fallen into the "holiday trade" posture, refusing to sustain directional momentum after economic releases, even if they were a surprise. Tomorrow is a data void, so the easy call is a quiet session, in a narrow range. However, experience reminds us that the latter half of December usually holds a few unexpected anomalies. We maintain our bullish fundamental viewpoint, despite being under a technical sell signal. That's an anomaly right there!

First resistance remains in the USH 12.28-00 zone, backed by the 9 & 40-day. Next resistance will emerge in the USH 113.10-16 area, backed by the 18-day, either heavy or a reversal zone.

Since the inverted H&S pattern has been negated, we are in a technical holding pattern. We are maintaining a steepening position with a bullish tilt, on a short leash. Why? Probably, because we see a major US economic slowdown developing.

The price levels USH 12.07-11, 111.23-31, an unfilled gap, 111.09-12 another unfilled gap, and 110.21-24 the last open gap are reasonable potential support zones.

Is the market just to long going into year end??? So say the pundits, we're not in agreement.    10:48 PM

KR Technical Analysis - - - USH7 Chart - - - TYH7 Chart
A combination of stronger than expected Retail Sales data, trapped longs, aggressive mortgage option roll downs and a so-so 10Y auction pummeled the Treasury complex today. While we view this price action as an over-reaction, it has neutralized our bullish technical stance.

We closed below the 18-day average, H&S neckline and created a daily chart"outside day" in today's slide. Amazingly, we are now close to oversold territory! The market must repair itself in the next two sessions. Last stand support, for the bullish chart pattern, is in the USH 112.22-26 zone, backed by the 40-day average. Below here, Bulls must be Very careful!

First resistance should emerge in the USH 113.08-14 area. The 18-day zone at USH 113.20-24 is now a either a heavy resistance zone or a reversal zone. The USH 114.00-04, 9-day zone, 114.16-20 and 114.28-00 are other potential resistance levels.

The belly of the curve outperformed today and the flattening trend seemingly ran out of steam near session lows. This gives us some solace, but we are on edge. We ponder, has the year-end illiquidity phase begun?    5:26 PM

KR Technical Analysis- - - USH7 Chart - - - TYH7 Chart
After a stronger than expected Retail sales report, prices remain under pressure. We have once again slipped below the 18-day ave, USH 113.24, and are tesing the daily chart H&S neckline in the 113.10-14 zone. This is area is important support, and we expect it to hold. With the 10y auction on deck, we may range trade for the balance of the morning. A close below this zone would be disturbing to our technical viewpoint, but we need two consecutive closes to turn our signal.    9:28 AM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
This marks four consecutive closes above the inverted H&S neckline breakout area, USZ 113.10-14. Recent economic data has enhanced our bullish fundamental outlook. The increasingly shrill, open mouth committee's jawbone is beginning to sound as weak as Coughlin's excuses for the collapse of the Giants.

USZ created a daily chart "inside day" for today's session, signalling an increase in volatility and range extension for tomorrow's trading. While not a directional signal, ALL other technical decision screens point to an UP move. Add to our usual basket of tech filters, the subtle change in curve movement towards the steepener.

Main near term support continues in the USZ 113.10-14 zone, now backed by the 9-day average. Key support is at the USZ 112.28-00 level, backed by the 18-day. All bets are off if this area is breeched by a close.

Light resistance continues in the USZ 114.00-04 area, with the beginning of overbought resistance emerging in the USZ 114.16-20 zone. There will be other stops along the way, but our chart objective remains around USZ 116.25.

An old time bond adage regarding the Fed, " watch what they do, not what they say". Really not sure who coined it, but it's becoming applicable at this juncture. It' a rookie Fed, PC, transparent, cocksure of their forecast and hell bent to contain the inflation boogey-man. Rarely, do rookies get to the championship game and that's our bet on these guys.    7:56 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
While well off the overnight highs, the market is holding onto solid gains and a daily chart upside breakout mode. Additionally, we opened a gap this morning, USZ 113.11-14, at the daily chart inverted H&S neckline level. Rather bullish in our opinion.

All our technical indicators remain in positive modes. The daily chart pattern will resolve itself by the end of this week. The bullish option, inverted H&S, MUST start a breakout, closing above USZ 113.10, by the end of this week. If not, the potential right shoulder, will be to large and negate the pattern.    9:03 AM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
The market is stuck in a narrow range trade thus far. A data drought, holiday week and options expiration Tuesday are the culprits. We are encouraged that the 9-day average, USZ 112.21-25, is providing support. This could lead to a slow grind higher as the session goes on, although and unchanged close would not be a surprise either.

All our technical indicators remain in positive modes. The daily chart pattern will resolve itself by the end of this week. The bullish option, inverted H&S, MUST start a breakout, closing above USZ 113.10, by the end of this week. If not, the potential right shoulder, will be to large and negate the pattern.    11:00 AM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
The "open mouth" committee trumped soft economic data as prices tumbled in today's session. Some serious long liquidation programs must have been executed. Frankly, we were stunned by Thursday's price action.

The USZ 113.12-20 area once again rejected a rally, taking out the 9-day in its wake. Look for light, initial resistance to emerge at USZ 112.18-22, the 9-day. We all know where major resistance is!

The daily chart unfilled gap (USZ 111.25-31) continues as the dominant, bullish technical feature, now supported by the 40-day. The bond remains under a buy signal, as the 18-day average zone, 112.04-08, stopped today's slide and we closed above it.

The USZ daily chart pattern options remain the same ie: forming a larger negative "double top" pattern. It could also just be a three point, sideways trading range pattern. as we continue in the Fed's "pause phase". Another option, is a bullish, inverted H&S pattern, which is starting to run out of time.

At this juncture, we don't know is our answer, but from a fundamental viewpoint, we remain even more bullish.    6:30 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
A weaker than expected ISM report propelled prices back to the Sep 25 - Oct 6 highs. This zone represents extremely overbought conditions versus the 18-day average. A combination of profit taking (makes sense) and reports of heavy dealer and prop desk short selling stalled upside momentum. The front end is once again at very steamy pricing.
The USZ 113.06-11 should contain the market until Friday's NFP report. A daily chart "double top" pattern formation is a possibility. Price appreciation above this zone would begin a new/major upleg, so be careful fading here and use tight stops. Next resistance should emerge at USZ 114.00-04 and 114.24-28.

First support is in the USZ 112.26-30 area. If it fails, it would constitute a rejection from the highs, and the ISM gains will have been erased, leaving the market vulnerable to further correction. The USZ 112.12-16 and TYZ 108.04-05 levels are now important support.    8:11 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
Today's punky price action must have been discouraging to the bull camp. Economic data was once again on the soft side, yet the 9-day average stopped a "dead cat" bounce right in its tracks! We now enter a data drought and thankfully, the "open mouth" black out period. However, a slug of front end supply is on the horizon.
The bearish tech picture remains solid, trend lines broken, daily and weekly chart gaps unchallenged, 18-day average down momentum accelerating, 9-day resistance after its bear cross of 40-day etc. The USZ 111.00-06 and EDU7 95.01-03, remain as important first resistance, employ tight stops if this area is breeched. The gap zone and trend reversal resistance is the USZ 111.15-21 zone, backed by 18-day average.

How the market performs versus the 9-day average, and more importantly the close basis, will be crucial to near term price action. Is it resistance, possibly signalling that a deeper price slide is in the offing? Or can it become support, suggesting that a near term bottom is in place? Around USZ 110.18 is the magic number, tomorrow.

First support remains in the USZ 110.08-12 area, and must HOLD! Next support is the USZ 109.30-110.02 zone. Further support should emerge in the 109.14-18 and 108.20-24 zones.    8:35 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
A round of softish economic data sparked an early bond market rally into the first important technical, 40-day average resistance zone. Upside price action stalled and was eventually rejected. This could be an ominous warning to the bull camp, that near term data will not be convincing enough ( read horrible ) to see a return of the Sep 22 - Oct 6 euphoria any time soon. Of course, CPI and Housing Starts have market moving potential.

The bearish tech picture remains solid, trend lines broken, daily and weekly chart gaps unchallenged, 18-day average turned down, 9-day in a bear cross of 40-day etc. The USZ 111.00-06 and EDU7 95.01-03, remain as important first resistance. However, since we are still under the influence of Monday's "inside day", employ tight stops if this area is breeched. The gap zone is USZ 111.15-21. Trend reversal resistance is in the USZ 111.27-31, 18-day zone.

Solace for the bulls: we are still in oversold territory. However, a surprise from economic data would make all near term support zones suspect. First support enters in the USZ 110.12-16 area. Next support remains in the USZ 109.30-110.02 zone. Further support should emerge in the 109.14-18 and 108.20-24 zones.

We remain on the sidelines, willing to pay higher prices if the tech picture can repair itself. Life during a Fed "pause" period can be treacherous ie: a three point range for USZ and 42.5bps for EDH8, over the past three weeks. Our best guess for the first ease remains May 2007, of course they could hike again first. Stay nimble!    6:40 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
The market stabilized at current levels, in a narrow range trade affair. A brief attempt at first resistance, USZ 110.18-22, fizzled.

Two additions to the bear side of the tech ledger. First, the 18-day average will turn down today. Secondly, the 9-day average will make a bearish cross below the 40-day today or tomorrow.

The market remains in oversold territory versus the 18-day average, which is the only solace for the bull camp right now. The raft of upcoming data must be bond friendly and spark a rally. Otherwise, the increasingly negative tech picture will overwhelm and send the market into a tailspin.

We remain on the sidelines, willing to pay higher prices if the tech picture can repair itself. Bottom fishing remains a very dangerous play here.    2:15 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
Yesterday's "inside day" works its magic once again as prices retreat, testing mid-Sep levels. Two additions to the bear side of the tech ledger. First, if we close below USZ 110.22 today, we will create a negative daily chart " outside day". Secondly, it is now safe to say that the weekly chart gap will remain open. This is a rare occurrence and generally not a great predictor. Nonetheless, it adds to the bearish technical picture that is evolving.

The market is in serious oversold territory versus the 18-day average, which is the only solace for the bull camp right now. Is the market over-reacting to the downside now? Maybe, but techs tell us to stay on the sidelines, despite our bullish fundamental outlook.    11:06 AM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
The market had a negative reaction to the Sep 20 minutes. We do not understand the bearish spin. Nonetheless, the late price action is disturbing from our technical viewpoint.

We closed below the 40-day average in all sectors. USZ is also below the weekly chart reversal level, 111.04. The EDZ6/EDH7 spread has collapsed from an intra-day wide, around -23.5bps, closing at -7.0bps, basically dashing any thought of an early 2007 easing move. Meanwhile, we are in oversold territory versus the 18-day average.

It is imperative that we see a price repair, close back above the 40-day by Friday. The Biege Book report tomorrow will be the day's major price influence. Initial resistance will emerge in the USZ 110.30-111.02 zone. The daily chart gap zone, USZ 111.15-20 should be stiffer resistance. The USZ 111.30-112.02 area is trend reversal resistance, backed by the 9 & 18-day averages.

First support is now in the USZ 110.16-20 area. Below here, support is suspect, emerging at USZ 109.30-110.02, 109.14-18 and 108.20-24.

Fundamentally bullish, technically a sell signal maybe taking hold. This is a tough call!!    7:48 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
After the initial price whipsaw, the market has been under persistent selling pressure. Feels like long liquidation, especially in the front end. The 18-day ave support zone, USZ 111.30-112.02, is being put to the test. If the 18-day doesn't hold, then the "double top" formation on the daily chart will kick in----downside objective is 111.00, the 40-day average. Also, if we close below 112.08 today, the daily chart will create a potentially bearish "outside day".    10:00 AM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
Another session punctuated with frenetic activity by the "big boys". The market continues to range trade within a one point band basis USZ. Some economic data arrives on Thursday, but the main event is Friday's CPI release, despite numerous reminders that core PCE is the revelant inflation indicator.

Upside price action stalled at the recent highs resistance zone, USZ 111.04-08. The fact that the day long daily chart gap was filled right near the close is probably a small negative. Activity above this zone would suggest the start of a new upleg with resistance emerging in overbought territory, USZ 111.24-28.

We are steadfast in our bullish technical viewpoint, but are cognizant of that fact that a round of "rate lock" selling could easily again test either first or second support areas. The 9 & 18-day averages back the first support zone, USZ 110.16-20. Second support is in the well tested USZ 109.30-110.02 area.

In the money market, we remain short EDZ6 and EDM7 versus our long in EDH8. We are comfortable going into CPI with this position. A friendly CPI report obviously is the better outcome. However, a print of +.3/.4 on core should result in some serious pressure on 2006 contracts.    10:39 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
If USZ6 closes today above the 18-day average at 110.13, it will leave the buy signal alive and well. If, we close above USZ 110.20, we will have created an upside 'outside day" on the daily chart, usually a bullish sign. Stay tuned!    2:31 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
Early session pressure, once again proved incorrect as the market has mounted a nice bounce. Today's lows were a second consecutive test of the important 18-day support zone, USZ 109.30-110.02. We have filled the daily chart gap from yesterday. We view this price action as supportive of a bull trend that is alive and well!

A close below USZ 109.28 would be a negative and change our stance.

Next daily chart resistance will emerge in the USZ 110.20-24 area, backed by the 9-day ave. Above here, look for a retest of the highs.    12:07 PM

KR Technical Analysis- - - USZ6 Chart - - - TYZ6 Chart
A battle royal has developed right on top of the 18-day average, USZ 110.01, in today's session. Volume is rather heavy and reports confirm that, across the spectrum, the players are back.

We view today's price action as a major test of the bullish trend that has been in place for quite awhile. A close above the 18-day is crucial to our technical posture. We opened a daily chart gap this morning, USZ 110.07-14. If, the gap remains open by the close, prudence might dictate a hedge of our long positions. A close below USZ 109.28-30 would be disconcerting and a negative.

If the bull trend is alive and well, the Biege Book, will spark a bounce at least back to the unchanged level.    11:54 AM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
Tuesday's price action was truly impressive from a technical viewpoint, once again confirming that the Uptrend is alive and well. The importance of economic releases escalates as the week goes forward. The 5Y auction is on deck. Anticipate better price volatility and volume.

The 2Y auction was a solid winner by the close. Fear of the FOMC minutes was overblown. Crude oil below $70 and Gold challenging $600 could be significant.

We created a potentially bullish, daily chart upside '"outside day". The first support zone remains USU 109.25-29, backed by the 9-day. The USU 109.12-16 area, backed by the 18-day, is now key support. Especially, after Tuesday's test of the Aug 18, inverted H&S, break-out level USU 109.18, and subsequent rally.

We will still call USU 110.06-09 a light, first support zone. If it holds, it could signal that a short term daily chart "double top" is in place, and suggest a retracement, at least into first support is a real possibility. However, if we open an overnight gap, this could signal the beginning of a new upleg. The next resistance zone is at USU 110.20-25, overbought territory. The measured daily chart objective remains, USU 111.00-16.

We are steadfast in both our technical and fundamental viewpoint. A week on the beach did nothing but re-inforce this opinion.

Our friend, Dennis Pettit of Market News cleverly sums up the FOMC minutes: "a pause is a pause until it becomes a halt....... and Fed is not at the halt stage although it may be leaning that way...inflation data likely to be at the fore from here on in, with growth data of secondary concern unless it starts to accelerate from the current level."    7:43 PM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
The final weeks of summer are upon us, with the market trading in about the middle of the yearly range. The USU chart has either a "double top" look at USU 109.18 or this is the neckline of a two week 'inverted "H&S" pattern.

The "double top" pattern would signal a near term high is in place and a correction, with a subsequent trading range, are about to develop. This would at a minimum suggest a retest of the 18-day average at USU 108.20. The USU 108.00 area is major support, backed by the 40-day average.

The inverted "H&S" pattern would signal a new upside move, probably a grinding afffair, with a measured move of the USU 111.00-16 area, our near term chart objective. This move MUST begin no later than next Wednesday, or the pattern will be negated. A close above USU 109.18 is the necessary event.

We remain in a bullish technical posture. The odds are 50/50 regarding the near term probabilities for price direction. As we are heading out on vacation, next week, we will move to a flat position stance. Trade cautiously, position players should employ tight stops until the pattern reveals itself.    9:45 AM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
The market is holding its gains after the surprisingly soft PPI data. We are holding nicely above the 18-day average, USU 108.10, and we anticipate a close above, keeping our buy signal alive. However, the gap resistance at USU 108.27-29 remains stubborn and may cap upside price action until tomorrow's data.    11:40 AM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
After yesterday's "outside" day, USU is poised to open a downside gap this morning. This signals some technical pressure on the market ahead of the the 10Y auction. We are below the 9-day average, USU 108.22, but anticipate that the second support zone, USU 108.12-16 will hold.    8:16 AM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
The entire interest rate complex is creating a daily chart 'inside" day, which is not surprising ahead of tomorrow's FOMC meeting. Remember, this signal predicts an imminent increase in volatility and range extension, not direction.    2:42 PM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
The long end of the market, basis USU, closed at it best level since Apr 5. The week's persistent positive price action, despite some stronger economic reports and European CB rate increases, was truly impressive. Confirmed reports of real money buying, to return to neutral bogeys, buttressed the firm tone. The NFP release, 3Y auction and FOMC meeting are the next hurdles for the marketplace.

There is a very real possibility that we have begun a daily chart upside breakout move. Negating the USU 108.12-14, double top pattern, and converting it into a first support zone has been key. The USU 107.30-108.04 area, backed by the 9&18-day is strong second support. Major support enters in the USU 107.06-14 zone, backed by the 40-day average.

There is an old daily chart gap at USU 109.00-07, that we will call first resistance. Above here, we see a serious bear capitulation and bullish grab-fest that should carry to the next resistance zone, USU 110.00-07 area. The measured move chart objective, from the bottoming pattern, USU 105.16-108.16, is the USU 111.16 area.

In the money market, we still like being short the 2006 contracts versus long 2007s and will add on any weakness. Our viewpoint remains overwhelming bullish both fundamentally and technically. Buy the dips! As our old friend Steve Consentino once said. "buy 'em til you puke"!    8:58 PM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
With price action higher in the overnight session, we are poised to open a daily chart gap. Anything above USU 108.11 will do it! This is a potential bullish, breakout move, but it must remain open thru the close. Ahead of NFP this is very curious.    8:03 AM

KR Technical Analysis- - - USU6 Chart - - - TYU6 Chart
Today's narrow, range session is setting up for the creation of a daily chart "inside" day. Remember, this signal predicts an imminent increase in volatility and range extension, not direction. Makes sense considering the raft of economic data ahead.    1:46 PM

KR Technical Analysis- - - USU6 Chart - - -