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T-BOND DAY-TRADING FOR WEDNESDAY, MARCH 3
USM9
R3 121 26/32
R2 121 13/32
R1 121 1/32
DP 120 17/32
S1 120 5/32
S2 119 21/32
S3 119 9/32
TODAY IS AN NR4 DAY!
If during the day tomorrow YH of 120-30 is exceeded then either buy
the breakout (agr) or buy the retracement to the breakout (cons).
If during the day tomorrow YL of 120-02 is exceeded then either sell
the breakout (agr) or sell the 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__
Today is a 2 Day ROC BUY day - Look for intraday signals to go long
Today is an NR4 & 2 Day ROC BUY Day. DEFINITELY TRY TO GET LONG!
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.
-------------------------------------------------
Commentary
The market lost no time yesterday in moving away from the DP and
breaking through Thursday’s low of 120-08. Once this happened it was
definitely time to turn to a bullish bias for the day. The advance was
initially turned back by a resistance line drawn from the 2/26 late
day pivot low at 120-21. But it soon found support again at the region
defined by the 120-05 DP, Thursday’s 120-08 low, and the 120-07
Overnight Hi (once a region with this many resistance lines is broken,
you can generally look for it to turn into strong support). It then
began an advance that marched right through R1 resistance, finally
being turned back just above Monday’s Hi and settling near the middle
of the day’s range.
The automated printout is telling us that for tomorrow, we have one
of my favorite signal combinations: a Narrow Range Day and a 2 Day ROC
Day. As stated in Monday’s commentary, NR days tell me to expect the
next day to be trending. Our job then becomes that of determining as
quickly as possible which direction that trend is going to be. The 2
Day ROC Buy day is the Raschke and Connors method of quantifying the
swing trading methods as taught by the Taylor Trading Technique. This
technique teaches that there is a natural pattern to the sequence of
buy and sell days. The 2 Day ROC Buy signal is telling us to expect
tomorrow to be the "buy day" part of that pattern.
I’ve stated this several times already, but I think its of benefit to
repeat, especially for the sake of those less experienced. DO NOT TAKE
THESE SIGNALS IN THE CONTEXT OF MECHANICAL TRADES. I am not a systems
trader, and as automated as the above printouts may appear to be, they
are such only to help simplify the discretionary part of my trading. I
use them merely to provide a "heads up" for tomorrow, not as a strict
set of rules, but only to aid in the creation of a "strategy" for the
next day.
We still have Friday’s Unemployment Report hanging over our head, but
I think there’s some potential for upside action tomorrow, especially
with it being a 2 Day ROC Buy Day. The 200 min. Double Stoch and 7
period %K are now definitely on the upswing (attached chart). Price
is currently above all of our 20EMAs except the 120 min, which is a
bullish sign.
Some support and resistance levels of concern. YH was 120-30. YL was
120-02. ON Hi is 120-30. ON Low is 120-21. (Overnight numbers are as
of 6:30AM CT). The 5, 15, 30, and 60 min. EMAs are all providing a
strong band of support from 120-20 to 120-16. The 120 min. 20EMA is
starting the day off with a line of resistance at 121-01. We have a
NAPM Services report being released at 9:00 CT. Greenspan begins
testimony at the same time. It always makes me a little nervous when
the BIG GUY is talking, but I have a feeling he’s going to be a bit
more careful this time around. Still, it’s best not to fall asleep at
the wheel (keep stops in place).
The ideal scenario for tomorrow would be a return of price to the area
of the DP and then a convincing reversal pattern to go long. Things
hardly ever seem to happen as we’d like in the markets, so don’t
expect it! There’s a significant band of resistance from 120-27 to
121-01 which includes the overnight hi, yesterday’s hi, Monday’s hi
and R1. I would not be surprised to see some hesitation and maybe even
a turnback from this level, but if it plows through, I think we could
definitely define this as being a trend day up. It’s not uncommon to
take three tries to get through an area like this, so don’t get shaken
out too early.
As I write this, the overnight is already making a convincing attempt
at this level, and may even get through before the day session begins.
If it does so, but still remains under the 121-04 level established by
the 2/26 intraday pivot high, I would expect the market to close the
gap from yesterday’s 120-19 settlement before advancing. Look for a
reversal pattern in this area to buy on. If we don’t get a return, but
instead keeps on going, the more aggressive may want to just hop on
board (not me - not with Greenspan talking today!), but a safer entry
might be to wait for a return to the 5 min. 20 EMA.
On the other hand, if the market totally rejects this band of
resistance and then drops through the DP we would also have all EMAs
acting as resistance above us, and it would be time to consider
shorts.
As always, I identify support and resistance zones and watch price
action carefully around these zones.
Bob Hunt
-------------------------------------------------------
There is a direct correlation between your ability to let the market
tell you what it is likely to do next and the degree to which you have
released yourself from the negative effects of any beliefs about
losing, being wrong, and revenge on the markets. - Mark Douglas in the
Disciplined Trader
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