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What-O Glenn
Sounds like you faded it?!
If a gap is more than a swing i.e. 8-10 or so ticks, then the market is
showing direction and you should probably follow, rather than fade. If it
is only a small gap, in single figures, then it is more than likely to come
back and fill it.
In this case, the gap was 12 ticks, which was iffy/okay in my book, in but
because it was through R1 and the Globex High, the chances were that it
would go on. A good bet, maybe! Clearly, one had to wait until the 7.30
Report and see whether that would help the decision making process. It did.
The market and the 6th bar was the retracement back to R1 (to pick up
the stops and the stragglers and that was the time to get long. Don't need
for
hindsight if you are following the map!
The market then hit R2 and retraced .618 (plus a final tick for the stops!)
which told you it was probably - but very far from definitely! - that it was
unlike to go higher. Stay long, find out. In the event it poked its nose
over the R2 parapet again, stalled for more than half-an-hour and came off,
producing what I think was the "Three Drives". The market then made the
double bottom, but it looked very wedge-like to me and I thought it was
going to go on. I measured the resulting retracement, which was a bearish
.500 and if you weren't short from the R2 stall, then here was the
retracement to get in - not that it went far, but six ticks up and six ticks
down is what the boring bonds is all about! Bread on the table is boring -
we all want jam (which we got three days ago!)
Yesterday was always going to be a consolidation from the Greenspan/Rubin
and Clinton acts the day before - which, incidentally, had a failed Third
Time
Through trade, but it was all too close to the announced hour in Washington
to be in the market.
Hope this helps. I'll probably tack these two days into the manual - as
well as, of course, the day before that, which, you will have spotted
without hindsight, had a gap to be filled - leading on this occasion to a
lovely, long stressless jaunt South for a $1,000 day!
Glenn, when you get the manual you will see how the road map with foresight
will put you in the right direction and all the road signs are there, to get
you to your destination - but you are bound to go down some blind alleys on
the way (that's why there ain't no Holy Grail). The trick is to retreat
fast and catch up on the main drag.
Kind regards
Bill
PS. To help those out there, as well, I thought you wouldn't mind my
posting a copy of this to the Omega List. At least it is ON post for those
who are learning to trade and want to make a living out of this business.
From: Glenn Pederson <gpeder@xxxxxxxxx>
To: T-BONDTRADER@xxxxxxx <T-BONDTRADER@xxxxxxx>
Cc: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Thursday, September 17, 1998 11:27 pm
Subject: Re: Bonds - Today's Price Action
Hi Bill!
On 17 Sep 98, at 19:07, T-BONDTRADER wrote:
> Today was a gap open that was, just, a gap to follow rather than fill.
> Hence you would be long from the open.
Boy, this sounds like hindsight! After the day was over it was
obvious that this gap was to follow, but why did you suspect on the
open that this gap was to follow rather than fill?
Thanks,
Glenn
gpeder@xxxxxxxxx
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