It was an average auction.

The TIPS auction was better than anticipated, especially the indirect bid. Technical buying and a weak stock market also helped.

The market has traded very poorly. Gold is trading above $600, which is indicative of the inflation outlook. Then there is fear about a strong jobs number tomorrow.

We're breaching key support levels here and that has triggered more selling. We're seeing a combination of central bank selling and portfolio managers hedging.

Five percent is looking more and more like the level where the Fed needs to stop. Anything beyond 5 and there's a real danger to over-kill the housing market, which would have a negative effect on the whole economy.

I was getting long all morning, because I can tell you the new houses on my street are not selling. A 10.5-percent drop reinforces what people are saying about the housing market slowing.