T-Bond trading comment (July 25, 2007)

Well, days go by and they start to all look alike. Again we tried new lows on the open, we failed and went higher afterwards ! Our bottoming out theory starts too look pretty sexy...

We started off the day with a little buying opportunity for scalpers just before the opening dive. Afterwards, we had a least two good opportunities to enter long in the market during the first uptrend of the day at 8h57 and 9h36. At 10h00, housing sales came out again weaker than expected but unexpectedly the market went down sharply. So long for the ones who bought on the news.... Rumour had it that there was some profit taking on longs as well as initiation of 5-30 steepners.... This down move was stopped by equity markets that were puking on the housing data. This continued for about half an hour before stabilizing and a big bid entered at 108-24 which thereafter served as a support.

In the afternoon, we had the 2 year auction (nothing special, no impact) and the Beige Book (again nothing special, no real big impact). Tomorrow we have durable good orders and a 5 years auction.