Ok, so 122 on the bond contract isn't quite


10,000. But it was enough to inspire a technical-driven rally amid very light trading in the Treasury market today.

A rout in gold helped push the market higher in the early going, and with tracker


reporting volume down 42% when compared with the average first-quarter Tuesday, the gains appear a little more significant than they actually are.

Of late, the 30-year Treasury bond was up 20/32 to trade at 96 21/32, yielding 5.48%. This is the first time the long bond closed through the 5.50% level since Feb. 23.

"Today is more of a session characterized by not so much a group of positives but more or less a lack of negatives," said Joel Marver, chief technical analyst at

Thomson Global Markets

. "There's no particular reason to fight this move right here."

Outlying factors that normally affect the bond market were mostly ignored. April gold futures fell 3.7 to 283.90, after

President Clinton

stated this morning that the U.S. supports gold sales by the

International Monetary Fund

to help fund debt relief for poor countries. The market finds bonds more attractive when commodity prices hit a trough, because it's one indicator of low inflation.

Once the bond contract hit 122, it was established as a resistance level and technical players that buy on momentum came into the market. Marver said the next key level is 122 16/32, which marks a 38% retracement from the recent low of 119 9/32 to the recent January high of 127 22/32. The June contract touched 122 14/32, but closed at 122 7/32.

Other factors mostly canceled each other out. The dollar was mildly lower against the yen and Swiss franc. While gold was under the markets' thumb, the


futures index rose 1.35 to 187.15. This morning the

Census Bureau

reported that the seasonally adjusted annual rate of

housing starts

fell 0.6% to 1.799 million in February -- not much of a comedown from January's rate, which was revised upward to 1.81 million starts.

On the other hand, the market's been very good at ignoring the housing data, filing those releases under the "consumer spending will slow down" argument. It wasn't too interested, then, in today's

industrial production and capacity utilization

release either. Industrial production rose 0.2% in February, while capacity utilization fell to 80.3 from 80.4 in January.

The dearth of corporate supply also meant that dealers weren't hedging those deals by selling Treasury securities. This activity contributed heavily to the market last week, and is expected to serve a similar purpose next week, when


(T) - Get Report

sells its gonzo $5 billion-and-counting of corporate bonds to fund its



"I think it's a little bit of a lull, with nothing to motivate new positions," said Dana Johnson, head of capital markets research at

First Chicago

. "Over the next couple weeks we're likely to keep this positive tone because it's the path of least resistance. The


and trade figures will make people more comfortable."

The current market forecast for Thursday's consumer price index is for a 0.2% rise in the core rate, which excludes more volatile food and energy prices.

Bill Sharp, economist at

Chase Securities

, thinks the market should brace for an uncomfortable surprise, saying the figure could rise as much as 0.4%. (Chase is forecasting a 0.3% increase).

"The risk is to the upside rather than the downside, which fuels fire for the hawks on the


," Sharp said. He believes the string of relatively low readings among the core CPI (two of the last three readings have been 0.1% increases) is likely to end with Thursday's report.

Alan Greenspan

spoke today before the

Independent Bankers Association

, but with the exception of his introductory paragraph, the


chairman devoted his speech to the agricultural economy. His introductory remarks were a rehash of earlier speeches, and didn't affect the market. Tomorrow's data are minimal -- just the mortgage applications survey and the Federal Reserve's

Beige Book

. Since the last official comment from the Fed itself was February's


testimony (notwithstanding a few quick remarks from the chairman two weeks ago), no doubt the market will take a look at this anecdotal survey. Its affect, however, is generally nil.