July 18-22, 2011

On Monday we had over 20 minus 1000 tick and penetrated the previous low of 1295. Our trade to buy a minus 1400 tick was not executed. A close below 125 on the bonds would be rolled downward. On Tuesday the minus tick was minimal showing that the bulls were able to catch any declines and turn them into rallies. We advised an S&P trade on a minus 1000 tick for 4 points profit with an 8 point stop and that profit objective was reached. The last hour was important to see if the close would be above 1327. This would mean the ceiling of the box has been breached. In the bonds we established some firm resistance between 127 and 127 ½. There is support between 125 and 125 ½. There was not much energy in the market on Wednesday. The news on the debt ceiling was inconclusive. Traders were standing and waiting. Rallies could not hold in the bonds. Many instances of high plus tick were experienced on Thursday. There were several plus 1200 tick meaning the institutions were back buying. The S&P was expected the close above 1327. The bonds slide downward. A roll down would require them to close below 125. There was a warning today that the US debt securities could be downgraded. On Friday, our short term recommendation to buy at a minus 1100 tick was close but did not touch 1100 and turned and rallied back 10 points. The lows today were just above our 1332 entrance point at 1332.75. This market is highly manipulated and the treasury is believed to be the new savior. We stayed in a narrow range with the bonds. We should see a normal bond environment shortly.