We'll have to be careful about thinking or saying that bonds have "confirmed" any sort of shift when it comes to established ranges or trends.  The last time we were in such a position was late last week when yields were clearly breaking up and out of the range, potentially signalling a troubling shift higher in rates.

How laughable that fear is now!  Well, to be be fair, the fear isn't laughable.  It was based on actual market movement that had already happened.  The better way to say it would be "how laughable would that fear have been if we knew what the following week would hold.  Yes, we did entertain the possibility that bonds were panicking a bit in the wake of last week's data only to be saved by the Fed, but the extent to which bonds have allowed themselves to be "saved" is rather impressive.  Moreover, the "saving" was already well underway on Monday and Tuesday before we had any idea what the Fed would say.

Another way to look at the surprising strength of the rally would be in the context of the stock market stalling out at recent highs and now moving decidedly lower today in the overnight session.

Either way, the bond market has now officially returned to the recent range, MUCH faster than even the bond bulls could have hoped for.  Additionally, the momentum technicals that I referenced as giving off halfhearted signals in late May are now reversing at more respectable levels (i.e. the purple line crossed below the green line while both of them were above the horizontal line).

A slightly more cautious way to view the same phenomenon would be to say that yields have merely moved back into a range that is still ascending in the bigger picture.

Today brings the last Treasury auction of the week (30yr bonds at 1pm) and the morning's econ data is already out with little fanfare (Jobless Claims and Producer Prices).  All that's left is to see how markets trade this out.  The fact that stocks are down so sharply suggests the bond rally has more to do with the broader risk-off trade than a delayed reaction to yesterday's Fed announcement.  So stocks could be a good thing to watch when it comes to early warning about a bounce.