30-Year Long-dated Bond Auction Results

"As has been noted all this week, starting with Monday's 3 Year auction which printed at the highest yield in 5 months, the $12 billion 30 Year Bond did not surprise, and at a yield of 3.381%, just inside of the When Issued 3.385%, it priced at the highest yield since August 2011, or just days after the US downgrade."

http://www.zerohedge.com/news/30-year-prices-highest-yield-august-2011

This is strongly encouraging news if the anticipated results would presumably affect GBN.V share prices, which are inversely correlated with U.S. long dated treasury bond prices.

Commercial traders who have rolled the dice since Dec. 2010 and doubled down their bets again and again against the company in favour of the U.S. bond market are digging in their heels today, absolutely certain that the Fed will step in and save the day, or that the company has nothing to show for its efforts. Imo, key information is being withheld by GBN.V on that score.

For my book, these commercial traders have been set up for a loss, and that traders taking a position last Thursday in GBN.V shares are correct in their assumptions, that buying GBN.V shares is a layup for higher share prices, or that company developments will finally draw some attention from investors.

Bond yields continue to advance this afternoon @3.40:

http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/

The last step would be to see how futures traders leverage up to take on delivery of their put contracts, whether this will set off a wave of selling on Tuesday, next week. A lot of these contracts had sold off last week, even though ppl. had been right about their assumptions, but would not have known until the very last minute how their contracts would inadvertently wind up in the money.

March Contract Options Chain:

http://quotes.ino.com/options/?s=CBOT_ZB.H12.E

Much of the trading had gone over to the June Contract Options Chain:

http://quotes.ino.com/options/?s=CBOT_ZB.M12.E

(each contract on the futures market represents one $100k treasury bond. Look at the bond price and the strike price, then the size of the contract. The bigger Put contracts will mostly expire in the money for the March contract.)

-F6