The big news of today is what was happening to the long bond. Bonds have been in a broad sideways pattern now for the better part of the last two months. They have broken down sharply over that time period only to be met by buying associated with the Fed's QE program each time they neared  the 119 level. That buying would then bounce them back higher returning them to level near 122 where they would attract selling which would take them back lower once again. It never seemed to fail that no matter how hard they would sell off, they were immediately resuscitated upon the reopening of trade in the evening session.

That all came to an abrupt end today when the bonds broke out of that sideways pattern falling through the floor of support near 119 and plummeting to as low as 117^23 before getting just a wee bit of a bounce before the close of trading.

The ramifications of this event are rather serious. As you are well aware of by now, the entire purpose of the Fed's QE program has been to bring down interest rates along the back end of the curve. The reasoning is that these longer term rates dictate the rate of home mortgages and other real estate related transactions. If rates can be kept low, borrowing costs drop allowing more potential buyers to emerge in the beaten down real estate market - one area of the economy that is stubbornly resisting any so-called improvement.

What is so remarkable about the price action in the long bond is that notwithstanding the fact that the Fed has announced and has already commenced the purchase of $600 billion of longer dated Treasuries, bond prices have refused to move higher. Instead they have now broken down meaning that long term rates are rising in the face of this massive intervention by the Fed into the US debt markets.

It is evident that the desire to sell US debt is gaining more and more converts which is going to present a set of fresh challenges to Fed policy makers.