Jun 142012

CL 12 12 (1 Min) 06.14.12

06/14/2012 30-yr Bond Auction (0701 HI time / 1301 EDT)
Previous: 3.09/2.7
Actual: 2.72/2.4
Started @ 149’24 (0701)
1st Peak @ 149’09 – 0705 (4 min)
15 ticks

Reversal to 149’29 – 0731 (30 min)
20 ticks

Notes: Report is scheduled on Forex Factory at the top of the hour, but the spike always breaks 1 min late. The highest yield of 2.72 is the lowest in years, indicating high demand for the bonds with the dollar and equities unattractive. This caused a delayed but sizeable short reaction for the bonds, as the yield fell by 15 ticks, crossing all 3 major SMAs and the PP Pivot near the origin and peaking on the :05 bar. With JOBB you would fill short at 149’21, with the 200/50 SMAs above and the 100 SMA/PP Pivot below, then have seen it pull back, repelled by the PP Pivot and the 100 SMA. Be patient and ride out the 4 ticks of heat on the :03 bar, as the :04 and :05 bars dove strongly to 3 ticks below the LOD. The second attempt to cross the PP Pivot was true and had a lot more inertia. I would close out at the LOD – 149’12 for 9 ticks. The reversal was able to rebound for 20 ticks in about 25 min, encountering resistance at the SMAs.