wed is the 10 year auction, whilst thurs is the 30yr auction. if I were a conspiracy theorist, or mutual fund long bond portfolio mgr. I would think that the way the auctions go could be key to some quick gains for the fleet footed. my thinking goes as follows, 10 year auction wed. afternoon (1pm est) is mid-land to poor results, setting up for a quick move to higher yields for longer term bonds at wed close. that would set up a further quick flurry of activity early morning Thurs.  just in time for a 'well' received 30 yr auction Thursday, and sharp long term yield decline into Thursday close and further running on Friday.  just speculation on my part, but TMF (the ETF) might be an interesting play come Wednesday afternoon and/or Thursday  morning. time will tell, good trading. I'll post if I take it.

actually per today's speech, as long as the equity mkt goes up (aka risk weighted assets levels and demand rise) and interest rate spreads contract, the world is ok, the absolute level of interest rates seems not to matter (yet), that's my interpretation anyway.  but someday it all will matter...

in Q and E session he stated specifically that GDP of less than 2.5% was critical to their thinking in Auggie 2010 in determining need to have QE2. (it was 2.0 then).  he stated that this is the level they will be looking at going forward too.

he said that Fed members gave 'hints' august 2010 that they were going to announce another asset purchase program (as they did officially in Nov). he also said they expected it to have the same impact on EQUITY prices as it did when they made a similar announcement in march of '09.  he also gave short thrift to tsy bond yields but emphasized the reduction in corporate bond spreads . he said fed has tools to remove stimulus to the system, but gave no hint to doing so, nor to changing the level of short term interest rates, nor really what level of economic strength would trigger them to do so. the Bernanke 'put' is alive and well. IMHO if there is going to be a QE3, they will hint at it (with a decent time lag) prior to the current program's (QE2) expiration in June.

as noted by sentiment trader: 94% of 2010's gains came during the first day of a new month.  61% of the entire rally was due to gap up openings on the first day of a new month.

A huge trade by a tiny hedge fund has sent shudders through the gold market.

Thanks to the nature of futures trading, Daniel Shak's $10 million hedge fund held gold contracts valued at more than $850 million, more than 10% of the main U.S. futures market, and the equivalent of South Africa's annual gold production.

But as gold prices started falling this year, the trade, which was a combination of being long and short gold contracts—bets that prices will both rise and fall—started going bad. Monday, he liquidated his position, and is returning money to clients.

As a result, the number of gold contracts on CME Group Inc.'s (NYSE: CME- News) Comex division plunged more than 81,000, to about 500,000, the biggest single reduction ever. While his trade didn't account for all of the contracts, an average daily move is about 3,000 to 5,000 contracts.

That Mr. Shak and his firm, SHK Asset Management, could control one of the largest positions in the gold market underscores how leverage can enable investors to control huge positions in many commodity markets.

"Yeah, that was just me liquidating my spread position," Mr. Shak, 51 years old, said in an interview. "I had a significant, fully margined position. The dollar amount of the gold liquidation was very small, it was just a lot of contracts."

Mr. Shak said he quit the trade when he was 70% down. People close to the firm confirmed the loss was about $7 million.

Just over a week ago, he put his apartment on Manhattan's Fifth Avenue up for sale with a price tag of $7.5 million. He said the sale wasn't related to his losses.

While the drop in contracts didn't appear to hurt gold prices, it caused some panic in the market. Brokers said they fielded calls from clients worried that a big trader may be dumping holdings. Monday, gold futures rose slightly to $1,344.50 a troy ounce and settled at $1,318.40 Thursday. The front-month contract is down 7.3% from its record close on Jan. 3.

thought provoking questions, if the rioting in Egypt gets worse, will it spread to oil producing countries (specifically Saudi Arabia) over the weekend. will it continue to effect the price of oil, already up $1.25+ today)? and consequently the dollar and treasuries (flight to quality?) and lastly world wide equity mkts?  is this the straw that breaks the camels back? (bad joke here, but couldn't resist) I know, per BPT follow the charts... But what if????