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Stewart:
I also saw but did not take this morning's break of that TL below the 3 drive
setup. I was long quite a few bonds and when I saw the setup, I did pare back my
position when it failed to hold the trendline. I then put stops in for the
balance of the position because we had a gap opening. I think if I had shorted
the bonds on the 3 drive formation, I would have looked for the bonds to at
least fill the gap to yesterday's high and perhaps test back to the 128 03-08
level, and a stop would have to be new highs...
For me, with the equities potentially having another run at a down 300-500 day,
being flat in the bonds is as 'short' as I would be. I might miss a downside
trading opportunity, but since the bonds did recover nicely yesterday, I have to
give them the benefit of the doubt, especially when the stock market is having
such downside volatility. For me, better safe, flat and profitable.
Best,
Tim Morge
Stewart Taylor wrote:
>
> Bob:
>
> I didn't take the trade this morning for a variety of reasons (not the
> least of which is that Im not really trying to fade the equities much right
> now). The way I draw the T-L entry would have been @ 26. Initial stop
> would have to be all of the way back up @ 129.05 and with the weaker
> equities and my generally surly disposition today, that would be a little
> far for me to fade.
>
> As for objectives, I usually make them up as I go. Often the market will
> descend one channel below the breakout point (roughly 11-12/32s). I do know
> this, If I had done this particular trade, given the trading background
> that has developed today... I would be a gone goose with a three - four
> tick hit.
>
> Hope this is helpful.
> Stewart.
>
> >Yes, I noticed this one on the bond chart, but I didn't act on it
> >because I'm a little nervous of the downside potential in the equities
> >(which would mean upside in the bonds). I just tend to get a little
> >gun-shy in this kind of volatility.
> >
> >If one had acted on it though, assuming you had entered around the
> >breakdown near 129-00, what kind of target might you set?
> >
>
> Stewart Taylor
> Taylor Fixed Income Outlook
> Voice: 501-219-9774
> Fax: 501-228-0963
> E-Mail: staylor@xxxxxxx
> Web Site: http://www.cei.net/~staylor/
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