Fast market conditions exist (rally) as the 30 year bond auction results hit the tape. Excellent bid to cover at 2.92 to 1 with 46.5% taken by Indirect bidders. Give this one an A. Earlier this morning, Weekly Unemployment Claims fell 26K to 550K. Continuing Claims fell 159K, the lowest level since April. One would have expected that stocks would be off today given the fist pounding health care speech which still includes the government option and that bonds/MBS would take a tumble on the jobs data. Not.
Stocks are up their usual 30 something on the Dow and bonds are on fire as the 10 year note is plus 28/32’s (yield 3.37%) and the 30 year bond is up 2 points. MBS are positive but trailing the pack, up 12/32’s on the day. We took a mark at plus 9/32’s so a price change is close but so far no cigar. Strange forces at work here that are driving the market so take advantage. Technically, buyers have taken pricing through major resistance which have formed bullish readings on trend studies and oscillators. The move has also confirmed a “hammer bottom” on yesterday’s candlestick charts however, daily studies will need time to catch up for a full blown rally.
Call the market, bullish, schizophrenic, Sybil (remember the movie), irrational, and interesting. It’s a lot like herding cats.