As Pomised...The Most Recent GovtTrader Newsletter...

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From: Govt Trader
Date: Fri, Nov 14, 2014
Subject: GovtTrader NewsLetter

Today the treasury market completed a 2nd consecutive day of bullish pattern price action.  Volumes may be on the low side (only 350bln 10yr equivs as i write this at 3pm), but the price action is clearly bullish.

Yesterday, going into and then coming out of the 30yr bond auction was a P-up.  The mkt repriced lower because of the tail in the 30yr bond auction, and then was clearly bought to create the P.

Today, the mkt sold off early with the 8:30 data, and then was bought again.  Today's profile also looks like a P-up.

2 consecutive days of P-up formations like this are indicative of an under-supply imbalance, and skew the market to higher prices.

If you are a fan of Mark Fisher's ACD system, yesterday was an A-up, and today was a failed A-Down followed by a C-up...which gives +7 on the number line.  The market has turned bullish, and dips should be bought.

You can watch a video of the Mark Fisher Trading Seminar on the GovtTrader.com blog

The weekly ZN mode / VWAP is 126-12.  Ideally, we will be able to buy that level next week...though the probability is on the low side.  I may be a little more aggressive (126-16 maybe?).  Regardless, next week should be very active in the markets, and the model has turned bullish.   I will be buying dips.