Bond bounce to run out of steam?

We've rallied a few points off the low in long bond futures -- from an intraday low in the high 104s on June 13 to a close of around 107 today. Ten-year yields have eased back to around 5.09%. I don't think the worst is over, though. This rally smacks of short-covering and consolidation of the big run up in yields rather than a change in trend.

Over the longer term, I tend to agree with Bill Gross -- that we've switched into a rising-rate environment from a falling-rate one. My best educated guess: We'll move up to 5.70% or so on the 30-year yield sometime in the next several weeks. That's the horizontal blue line on this monthly chart, which also shows that we broke above a long-term downtrend several months ago.