T-Bond trading comment (July 27, 2007)

After yesterday's panic, today promised to be an interesting day and it was even if we closed up a paltry 2/32. We started off the day with some aggressive bidding trying to take out yesterday's high and we succeeded as we went up to 110-10 while the S&P500 futures were puking, but as soon as 110-10 was reached, sellers came in and the fall was as abrupt as the climd had been. At 8h30, we were firmly in a down move when the GDP data came out with a strong 3.4% that reinforced the bears in their activity. At that point, the market seemed keen to take out the resistance at 109-16 and really retrace yesterday's move. In any case, we bounced strongly on the 109-16 support and went higher on heavy volume..... From that point on, the T-Bond market had no more will of its own and simply followed the equities.