4/27/2009 3:27 PM
The analysis coming into today was to sell the 125-00/12 area to retest 124-12/16. The market hit 125-04 and 124-00 in today’s day session. The 2Y auction was a good one and the market recovered from 124-07 to close around 125-00. Tomorrow’s 5Y auction should be the dynamic that controls the market’s action. Basically see a trading range market w/a seller above 125-00 and a buyer below 124-08 and plan on trading this range.
F1 Comments: The market is in a longer term down trend. A new move lower may have started on B. We are at support. This week’s auctions may slow the recent selling too.
F2 Comments: The market showed a trading range today. I think that the market will probe higher, but find sellers above 125-00. This selling should take the market back to 124-08/16. Short term the market needs volume from 124-08 to 124-28. If the market does continue its rally from the 2Y auction at noon today, then the selling should emerge again in the 125-20 area. Some news tomorrow: consumer confidence is expected at 28.8 and Shiller Case Index at -18.5. The 5Y auction at noon CDT, should be the market’s focus. Usually the Dealers run a good auction/bad auction strategy. I am guessing that the 5Y auction will be the bad auction. If not, the market will continues its rally tomorrow off the day session’s opening. Can sell failure at 125-00/04 or 125-20. Or buy w/signs of support at 124-08 OB.
F4 Comments: The analysis favored a sale. The market made it to 125-04 before the sellers entered the activity. This selling was present until the 2Y auction took place. 124-00 held, the 2Y auction was deemed a good auction and the market rallied to close at 125-00+/-. The software generated valid buy/sell signals as the market activity allowed.
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