The bond market traded in a fairly narrow range last week, as it held key support at 140 through the period. The 10 Year Treasury Note yield is back below 2% again, kicking around the bond bears in the process. There was no renewed talk of QE3 from any talking Fed Heads, but the nervousness in stocks coupled with rising European Sovereign yields was more than enough to provide solid support for bonds in spite of the heavy issuing calendar and negative seasonal influences. The auctions last week were mediocre, but good enough not to cause any concern. Traders were astute enough again to take down the 30 year tranche at the lowest prices of the week. The bond market was relatively stable considering the roller coaster we had in stocks and a few other things. Stocks and bonds are quite close to fair value. So there is no compelling reason to stick our neck out on that front other than the momentum that is rolling from stocks into bonds.