Another Green Day, But Can We Trust It?

Bonds were briefly weaker mid-morning, but rallied back to close at slightly stronger levels. We've been defensive about the upward trend in rates for more than a month now and generally on the lookout for enough of a rally to let our guard down a bit.  With the past 3 business days seeing anywhere from modest to moderate improvements, is it time to conclude we've seen the worst of the recent drama?  In a word: no.  Bonds have a lot more ground to cover before we'd think about that as something more than just another possibility.  Even then, we're expecting a fair amount of volatility surrounding next week's Fed announcement.