David Fuller's view Yesterday I reviewed long-dated government bond yields which have broken their short to medium-term downward trends this week. At Fullermoney, we maintain that they are in a long-term bottoming out and base building process following a 28-year bull market during which yields ranged lower.

The base building phase can take years as you can see with US 10-year Treasury yields (historic & weekly) which bottomed in December 2008, just above 2%. The next important low occurred in October 2010, near 2.33%. This week we have seen what is likely to be another important and rising low at 2.84%, judging from the upside weekly key reversal.

It is anyone's guess as to when the Type-3 base in US Treasuries is completed by a sustained break above 4% but the next important clue will be a higher high, clearing the February high near 3.78%. Meanwhile, if yields are bottoming out their corresponding futures contracts should show similar patterns, albeit somewhat stronger because they also reflect the yield.

You can see this with US 10-year Treasury bond futures (weekly & daily) from their rising lows, with the second peak just below the December 2008 high. During the last four days T-bond futures have retraced the previous eight week's gains, forming a weekly key reversal in the process. This looks like another important high in the top building process for bond futures and a close above 125 would now be required to challenge this view.

If my reading of these charts is correct, the next really significant technical development will be a sustained break of the year's earlier lows. Meanwhile, 10-year Treasury futures have reversed a short-term overbought condition and are temporarily oversold following the sharp drop since Monday. Therefore we may see some temporary steadying before prices resume their decline.

Commonality is important in technical analysis and you see similar patterns not only with US 30-year bond futures, as one would expect, but also the 10-year contracts for Canadian, UK and German bund futures.