Let's take an updated look at the bond market via the iShares Barclays 20+ Year Treas Bond ETF (NYSE: TLT). After all of the fireworks from Wed's ADP forecast for additions to payrolls of nearly 300,000 into this morning's disappointing payrolls data reported by the Governement, we find the TLT's over $1.00 off of its recent low of 91.03 in what looks like the makings of a secondary low within a base-like pattern the started at the Dec 15 low of 90.47.

Based on my pattern work, barring another plunge that violates 91.03, the TLTs look like they are carving out a meaningful base from which a potent recovery rally should emerge-- that propels prices back to the 94.00/50 resistance plateau, and perhaps higher thereafter.

For such a move to happen, perceptions about a strong recovery in employment will have to be tempored, while the Fed Heads will have to hit the airwares to reaffirm their commttemt to QE2 to continue to create more fertile (profitable) business conditions that will eventually lead to job creation too. Within such an environment, the TLT's should mount a meaningful recovery rally.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.