How disappointing.

With the bears firmly in charge, two days of support are clearly out of the question. The market managed a decent enough rally yesterday, only to see it erased today on the back of robust car sales data and very little news otherwise. The cash market came under the thumb of hedge-fund selling, even though the futures contract came out reasonably on the day.

"The pressure on the cash bonds is dragging the rest of the market down," said Mark Sauvigne, government bond trader at

Chase Securities

. "We're not going to find buying until we clear the air Friday with the jobs report."

Lately the 30-year Treasury bond was down 1 2/32 to trade at 93 20/32. The yield rose to 5.69%, its highest point since the end of July. Ten-year and five-year notes were also down significantly, although the two-year note dropped only 3/32.

Today's most damaging news items were the February auto sales data.

General Motors'

(GM) - Get Report

February car sales increased a surprising 18.8%. Domestic car sales rose 7.6%, while truck sales increased an even more impressive 15.7%. "The recent data indicate that the economy's underlying growth rate is somewhere between 3% and 4%," said a comment by

Barclays Capital's

Henry Willmore.

The June bond contract fell 9/32 to trade at 119 25/32, not far off Thursday's low of 119 22/32, a level tested earlier this week.

"We're spending too much time at the lows," said Walter Burke, technical analyst at

MCM Moneywatch

. "If we were making the bottom we wouldn't be testing this area for a third time."

Burke is expecting the market to test the lows again Friday, which coincides (surprise!) with the release of the February

employment report

, provided the

Bureau of Labor Statistics

doesn't somehow press "return" and accidentally broadcast it in Times Square. Current forecast is for another 245,000 in nonfarm payrolls: A stronger figure would probably result in a new low, while a weaker number would engender a rally.

"We're back to an early-1997 or standard U.S. model where investors are obsessing on economic data and looking for nuances out of the various

Federal Reserve

governors' statements about the U.S. economy," said Jack Malvey, chief global fixed-income strategist at

Lehman Brothers

.

Which means the support from Japan's markets didn't affect bonds at all. Japan's benchmark 10-year bond fell 11.5 basis points to close at 1.695%, the lowest closing yield since Jan. 14, and dollar/yen was lately up 1.76 to 121.87, nearing the 122 level for the first time since the beginning of December.

Some surmised that the bond market, in a fit of nervous energy, traded downward before

Fed

Chairman

Alan Greenspan's

testimony before the

House Commerce Committee's

Subcommittee on Finance and Hazardous Materials. Greenspan stuck to the topic at hand (no, not hazmats), reiterating his positions on the use of the government's surplus for Social Security and putting said money into private equities.

"Given the way the market punditry is set up, if Greenspan were to open the door of the Federal Reserve, look right, look left, look center, and declare that today is Wednesday, there would be people spinning that whatever way they'd want to spin it," said Malvey.