After a quiet, boring Tuesday, Wednesday is bringing the heat.  It looked like things would get off to a solid start for bonds after weaker ADP data early, but a very strong ISM services report sparked heavy selling in the AM hours.  We'll be assessing the risk of a slightly bigger-picture bounce throughout the day.

In the bigger picture, it would take quite a bit of weakness to meaningfully threaten the prevailing downtrend in yields (attention bond market: we're not daring you to try it... just pointing it out), but any time a rally lasts this long and hits longer-term lows, there's a risk of a bounce in general.  If we're looking for more specific cues, we might worry about the double bottom mentioned yesterday at 1.15+.  Rates have bounced at or near that level 4 times in the past 3 weeks, and 3 times on the 3 days of the current week.

Zooming in to an hourly view shows another double bounce at 1.128 and a fairly obvious technical pivot point at 1.223.  After that, the "game over" level would be 1.29%.  Breaking and holding above that would go a long way toward signaling an end to the bond market's summertime bull run.

Of course, we're getting way ahead of ourselves by discussing such things at this point.  After all, this morning saw the lowest yields in 6 months, so this would be "day zero" of any potential bounce.  Still... the more prosperity you have, the more you have to lose, and bonds have grown quite metaphorically prosperous recently.  So it's fair to be a bit worried that any sharp individual bounce might be the start of something worse.  The point is that we'd wait to freak out until things get worse (hi again bond market, again, that wasn't a dare...).