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I've had some questions about how I use these automated printouts that
I sometimes post. I thought I'd walk through one as an example. If
there's any interest, I might consider making this a regular thing.
Again, these printouts are not meant to be used as system trades, only
as an aid in providing a "heads-up" for day-trading the T-Bonds.
NOTE: all levels are for the June contract.
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T-BOND DAY-TRADING FOR MONDAY, MARCH 1
USM9
R3 122 18/32
R2 122 1/32
R1 121 15/32
DP 120 28/32
S1 120 10/32
S2 119 23/32
S3 119 5/32
TODAY IS AN NR4 DAY!
If during the day tomorrow yesterday's high of 121-13 is exceeded then
either buy the breakout (agr.) or look to buy a retracement to the
breakout (cons.). If during the day tomorrow yesterday's low of
120-08 is exceeded then either sell the breakout (agr.) or look to
sell a retracement to the breakout (cons.).
*** If no other direction is specified by other indicators ***
** favor that of the 100 min. 5 Double Stoch 2 period slope.**__UP__
MONITOR FOR HOLY GRAIL SETUPS! If the 5/15/30/60 or 120 min ADX>30
then look to trade the bounce against that period's 20EMA with the
last intraday swing pivot extreme as the target.
Watch for OOPS! Trade - If O < YL then buy YL on a stop.
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The following is the type of analysis that I run through each morning
in preparation for that day's trading:
Friday was an NR4 day, which means we've been undergoing at least some
period of contraction in the market, with the potential for a
breakout. I'll usually enter these days assuming that it will be a
trend day and then try to determine which direction that trend might
be. The 200 minute double stoch (attached chart) is telling us that
we've just made a trough in a short term cycle and we're starting to
head up. The slope of the 7 period %K is rising, coming out of an
oversold zone. Intraday charts have the look of a bullish triangle
coming out of the pivot low established on Thursday. All of this is
telling me to enter today's trading with an upward bias.
I would assume that after the severe downmove last week, the market is
starting a consolidation phase, so we can expect price probes in both
directions. Eventually, the outline of a triangle should be
determined, and our job becomes a matter of trading that triangle.
This is where the double stoch and 7 period %K indicators come in real
handy. They are very good measures of the cyclical nature of the
market during these triangles.
Although I do not normally make astrological observations, I HAVE
noticed that the full moon does seem to have an effect on this market.
Tuesday is a full moon. Typically, the day before or the day after the
full moon marks a daily swing pivot in bonds. Considering the oversold
levels that this market has recently attained, my assumption would be
that the turning point will be on Wednesday instead of today.
Some significant support and resistance zones to consider today:
YH was 121-13. YL was 120-08. Overnight Hi is 121-11. Overnight Low
is 120-23 (Overnight numbers are as of 6:30AM CT). DP is 120-28. The
5,15,and 30 minute 20EMAs are all clustered around current price
levels. We have a 60 min. EMA at 121-05 and a 120 min. EMA at 121-22.
Of course, the 60 and 120 min. EMAs are going to change throughout
the day, but for now, they have to be considered potential overhead
resistance.
We have some minor reports coming out at 7:30 CT and a more important
one coming out at 9:00 (NAPM Index). I will avoid holding positions at
both of these release times.
With current levels near the DP and Overnight Low, the first order of
business once the market opens is to evaluate price action near this
level. I'll watch for a classic reversal pattern here on 5 min bars.
If such a pattern develops, I'll buy with a stop just under the DP.
If, instead, price drops lower than the DP, the next level where we
might see some support is the late day pivot low from Friday at
120-21. If, instead, it soon becomes obvious that the DP has switched
from being support to being resistance, I will change my bias for the
day to bearish.
If price does not give us our test of the DP then we have to watch
what it does directly above. We have the Overnight Hi at 11, YH at 13
and R1 at 15. This is an important enough band of resistance where we
should get at least some sort of bounce. If not, then the trend for
the day has been determined and its time for us to climb aboard!
And that's pretty much how I track the market the rest of the day. I
keep an eye on identified support and resistance levels and watch how
price behaves near those levels.
No rocket science here! But discipline, patience, and flexibility are
important.
Bob Hunt
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The markets can't do anything to you if you trust yourself to act
appropriately under any market conditions. Learning this is the key to
gaining the level of confidence every trader needs to be successful. -
Mark Douglas in The Disciplined Trader
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