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T-BOND DAY-TRADING FOR THURSDAY, MARCH 4 - released 6:30AM CT, 3/4/99
Automated Printout Section
USM9
R3 122 8/32
R2 121 14/32
R1 120 19/32
DP 120 5/32
S1 119 10/32
S2 118 28/32
S3 118 1/32
Today is a 2 Day ROC SELL day - Look for intraday signals to go short
C<=20% OF THE DAY’S RANGE
80-85% chance that today’s low will be less than yesterday’s.
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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Commentary
This market has been whipsawing many of my system set-ups this week.
It’s a good lesson in the importance of remaining flexible and relying
on price behavior as the ultimate determining factor.
It’s also a good lesson in the proper way to regard these types of
setups. I think many beginners, in their unending search for the one
and only ultimate indicator, tend to look at these types of signals as
some sort of magic key in which to decipher the market’s next
direction. On the other hand, I tend to look at them as forces
applying "pressure" to the market’s direction. The "pressure" being
applied to yesterday’s market by the 2 Day ROC Buy signal was upward
in direction. The fact that the market was NOT able to surmount enough
energy to blow through the nearby band of overhead resistance, even
with the increased pressure from the 2 Day ROC Buy signal, was enough
reason to expect the market to trend in the other direction. The
impressive thrust downward through the DP confirmed it, and the market
was nice enough to return to that zone to give us another opportunity
of entering on the short side. Just gotta love them bonds!
As mentioned in yesterday’s commentary, the NR4 signal forecast a
trend day, and that’s exactly what we got. The market continued south
throughout the day, initially pausing long enough to create a triangle
on 5 min. charts in the zone surrounding S1. More often than not, such
intraday triangles break in the direction of the previous intraday
trend. We had every reason to expect the market to break down even
further from this point, and it satisfied our expectation, finally
finding support along a line created by a 3/1 intraday pivot low.
For today, the automated printout is giving us some bearish signals.
We have a 2 Day ROC Sell signal and yesterday’s close was less than
20% of the day’s range, indicating a good chance that today’s low will
be less than yesterday’s. My only hesitation is the fact that we are
once again in a zone where many existing shorts are sitting with their
fingers on the button, just itchin’ to exit if any sort of correction
begins to rear its ugly head!
The 200 min. double stoch and 7 period %K were not able to get any
upside going on their last swing higher (attached chart). Both are
back to their oversold zones, but that doesn’t mean much when the
overall trend has been so decidedly negative.
Some support and resistance levels of concern. YH was 120-31. YL was
119-22. ON Hi is 119-29. ON Low is 119-19. (Overnight numbers are as
of 6:30AM CT). Initial Claims is released at 7:30 and Challenger
Layoffs at 9:00.
The ideal scenario would be a return to the 120-02 to 120-05 zone,
where we have today’s DP, a late day intraday pivot high from
yesterday, Tuesday’s low, and the 30 minute 20EMA. A short entry on a
5 min. reversal pattern with a stop just above this zone would be
appropriate. If, on the other hand, price were to move through the
120-05 DP, longs should be considered. I would not be a bit surprised
to see any move through the DP eventually return to the DP before
advancing further (just as it did today). But, at this point, I just
don’t see this market getting wildly bullish in front of Friday’s
Unemployment numbers. Needless to say, I’m not real thrilled with
getting long at this point.
But, as mentioned before, price is always the ultimate determining
factor. Identify support and resistance zones and closely watch price
activity near those levels.
Bob Hunt
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