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>Great Poem from a great pet/story teller but what do you mean with the
lines
>below?
>
>:Anyway, with the Bonds and the S&P poised with longedy, legedy dojis and
>:hang men, to change course, in opposite directions, Monday morning might
be
>:a touch more lively than usual.
>
>Have you found candlesticks pattern recognition useful or must one use them
>in combinations with other tools?
* * * * * * * * *
While I, personally, use terms such as "Up-thrust" and "Down-thrust", which
is what the T-Bonds and S&P made, respectively, on Friday, I used the
candlestick names as being probably more common. In any time frame they are
strong reversal signals - but for how long is a different matter. A large
daily bar thrusting into new territory and making a new contract high, is
definitely significant. The S&P down thrust went into recent new territory
and I would expect it to follow through with an up day. My CBOT calendar
doesn't announce any Reports, Greenspan is not talking, so all looks quiet -
but if Clinton decides he needs more diversions in the Middle East, the
markets might take a different view. Who cares? I day trade. The market
will open and tell us what it is going to do...
Where the Spoo guys have an advantage is in watching the Boos for the first
hour. If they are down and going down (which is favourite at this stage),
the S&P on Globex will already have been trading up and the stock market
likely to open that way. After that watch the Bonds, they lead... in
the opposite direction!
Friday was a marvellous Bond Day - up the hill for a thousand and down the
hill for another thousand. An 18 tick gap opening to a new contract High,
you gotta buy... If the initial bearish retracement took you out and you
went on and sold the double top, you'd only have lost a couple of ticks -
but the 'through on the third' would have sent you flying, with two
excellent places for adding to the position. The big reversal at the top
(with heavy tick volume) sent you down the hill with a pocket full of tin.
The aggressive trader would even have found another spot to add to his/her
position.
Up-thrusts are excellent for T-Bond day traders, because you get double the
movement in the same distance. And they're very good predictors for
position traders.
I attach a .gif file, which I hope will help you to see the action. For
those on the list who can't get it, I will have it in my manual, as it is
such a good example... The whole chart was one which could be read with
foresight and, because it is not a crazy volatile instrument like the S&P,
it is eminently tradable, with any slippage to your advantage, rather than
the reverse. While the Spoos can really only be traded with electronic
orders direct to the pit , when the hardware is working (and failure must
give a few people kittens, on occasions!) if that means relying on the
internet from here, where I have overhead cable, forget it, I say, forget
it! In any case, highly volatile markets are all so much stress, high
margins and the rest, but good luck to those who think they've cracked it.
A slow and sure Up-Thrust on the T-Bonds is more to my liking, for a living.
Anyway, on Monday, you could look to sell the Bonds (depending on other
factors, such as the overnight on Globex, any gap opening, etc) but really
one should not prejudice one's thinking and rely on what the market is
telling you at the time. Remember, all the time you are only looking to
identify the trend, make it your friend, and wave goodbye at the end!
(That'll be in the manual!!)
Bill Eykyn
Picture Attachments:
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File: Profitable Up-Thrust (1).gif
Picture Attachments:
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File: Profitable Up-Thrust (2) (2).gif
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